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BizTrends 2017

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Govt skills shortages delay infrastructure development

According to the Mail & Guardian, recent results from South Africa's biggest construction firms have made it clear that delays in issuing large tenders are hurting the sector. The government has admitted in Parliament and in discussions about infrastructure development that there are skills shortages.
Aveng Group chairperson Angus Band told shareholders that South Africa's R844b public sector infrastructure spend had not "translated into increased tender activity in the local market." Aveng's orders had fallen by 9% since the end of June, and only 3.6% of its total order book was now coming from South Africa, down from 10.5% in 2010.

Murray & Roberts, too, say that no tender documents for major infrastructure projects had been issued by the government. Basil Reed and Group 5 saw their results plunge 78% and 64% respectively. Lack of project management and engineering skills in government seems to be at the root of the problem. The national planning commission data shows a 30% drop in public sector spending on infrastructure since 2008, the Mail and Guardian says.

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