State construction co proposal - for real?

Posted On Tuesday, 28 August 2012 10:31 Published by Commercial Property News
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Before taking any decision to start a state-owned construction company to build houses for the poor there should be a thorough investigation of why the present system of using contractors has left the country with a R50 billion account to repair shoddy buildings, says the Cape Chamber of Commerce and Industry

Michael BagraimThe state construction company was suggested by the Human Settlements Minister, Mr Tokyo Sexwale, as a possible answer to the problem.

Mr Michael Bagraim, President of the Chamber, says the Government was right to be concerned and investigating alternative approaches made sense.

At the same time he warned that there was a danger of repeating mistakes unless a thorough investigation was made.

Mr Peter Haylett, Chairman of the Chamber’s Industrial Focus Portfolio Committee, said the real causes of the shoddy houses could lie in the specifications, the way tenders were awarded, the supervision or the materials used. An investigation might reveal a “tendrepreneur problem” and not a construction one.

“Social housing is a municipal responsibility and municipal service delivery has become a major problem, but there is no guarantee that a completely new government-run construction company will get it right. In fact, a long and expensive learning curve is likely.”

He said the problem might be as simple as a failure to inspect work and make sure that inexperienced construction firms were adhering to the terms of their contracts.

“The other big problem is costs. Public sector wages and benefits are much higher than in the private sector so the costs will go up.”

Mr Haylett said a better approach might be to use Seta funds for training in basic building skills and really good inspection teams to advise and help municipalities develop the skills to award and manage contracts. CBN

Last modified on Friday, 21 June 2013 19:00

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