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Economy
Friday, May 10, 2013 - 09:53
Building confidence

Despite spending cuts made to its budget the Government continues to remain focused on construction through the National Development Plan.


Brian Africa, Marketing and Business Development Executive at PCBS, a specialist construction Underwriting Management Agency, says, “It is reassuring that, in spite of fiscal challenges and slower than expected economic growth, the R827 billion targeted to be spent on construction over the next three years by fiscal and State Owned Enterprises (SOEs) will not be affected by spending cuts made to the budget.”
Africa believes the local construction industry will in fact receive a much needed lifeline with the fiscus having allocated R430 billion for schools, hospitals, clinics, dams, water and electricity distribution networks, the electrification of over a million new homes, sanitation schemes, as well as additional courtrooms, prisons and improved public transportation facilities. “With the majority of local SMME construction companies predominantly working at Provincial and Municipal level, it is hopeful that the availability of funds in conjunction with the training and development of municipal managers will work towards yielding better service delivery to communities,” he adds.
For government to ensure it meets its construction investment objectives Africa says the development and training of municipal staff, particularly managers is critical. “Municipal managers need to be skilled and guided as to what community projects in terms of the supply and maintenance of basic amenities should be prioritised. Municipalities that engage their communities and promote job opportunities through implementing policies that ensure local communities are involved in and take ownership of local construction projects will go a long way in promoting basic service delivery. There is also tremendous opportunity for increased job creation through recruiting the locally unemployed to provide the unskilled labour for these projects,” he comments.
For municipal projects to be truly effective, Africa believes the employment of local residents and service providers’ needs to be made mandatory. However smaller contractors also have their part to play if they are to benefit from the budget allocation to municipalities. “Smaller contractors should ensure that they attain higher CIDB (Construction Industry Development Board) gradings by accessing resources provided by the new Small Enterprise Finance Agency.
The budget allocation to municipalities will certainly do much to stimulate the SMME Construction sector as these projects can be designed to not only engage local contractors but also the community at large,” he comments.
To enhance service delivery further Africa says that municipalities that lack capacity should be encouraged to centralise the supply and procurement processes to provincial government. “It is essential that municipalities promote a culture of accountability and implement measures to ensure proper financial management. This again links back to the training and development of municipal staff and the essential role it will play in ensuring government meets its service delivery objectives.”
 

Copyright © Insurance Times and Investments® Vol:26.5 1st May, 2013
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