R1.5bn for socio-economic development fund

© Leon Swart – 123RF.com

“The objective of the fund will be the development, enhancement and transformation of the industry, as well as the promotion of social infrastructure for all South Africans,” Economic Development Minister Ebrahim Patel said on Tuesday, 11 October, in Johannesburg.

The fund will support initiatives that will provide financial support for young trainee artisans and engineers from disadvantaged backgrounds and also provide support for the teaching of maths and science education at public schools.

Other initiatives include funding for social infrastructure and the development and promotion of construction companies owned and managed by black people.

“It also includes funding the appointment of professionals to provide government with engineering, project management and other services to strengthen its capacity to deliver the public infrastructure so desperately needed through, among others, the secondment to State departments, municipalities and entities of skilled personnel from organisations operating in South Africa,” Minister Patel said.

The agreement was reached with companies with a combined annual construction revenue of about R45bn, comprising WBHO, Aveng, Murray & Roberts, Group Five, Basil Read, Raubex and Stefanutti Stocks.

Six of the companies signed the agreement on Tuesday, while the seventh will advise within the next week.

According to Minister Patel, each of the companies will undertake further transformation initiatives with two models.

“Firstly, that companies become fully transformed, with at least 40% of equity in the hands of black South Africans or secondly, that they commit to initiatives that will result in each of the construction companies mentoring up to three emerging black owned enterprises so that they develop the necessary skills, systems, status and quantity of work to be able to sustain a cumulative combined annual revenue equal to at least 25% of each of the mentor companies annual revenue by 2023,” he said.

As part of the agreement, each company has signed a declaration to promote ethical and legal operations, free of collusions or corruption and to confirm that they will expose, confront and eradicate any sign of wrong doing in the industry.

South African Federation of Civil Engineering Contractors (SAFCEC) Webster Mfebe said the industry is committed to strengthen its partnership with government for the benefit of the country.

“This arrangement also demonstrates the commitment to a transformed, transparent and ethical industry, which has a major role to play in delivering much needed infrastructure to the economy of South Africa.

“We believe this partnership will reinforce the framework for a more sustainable and competitive industry and is set to advance the social and economic welfare of all South Africans,” Mfebe said.

The fund is expected to be launched in the next financial year.