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Criminals hinder South African construction projects

5th April 2019

By: Bloomberg

  

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To download a copy of the letter sent by Safcec to Minister Tito Mboweni, click here  (2.31 MB)

A South African engineering contractors lobby group has asked government to better enforce security, as criminals have disrupted or vandalised construction projects valued at R25.5-billion across the country.

Armed gangs recently disrupted the R1.65-billion Mtentu Bridge project, in the Eastern Cape province, and a R2.4-billion oil-storage investment project at Saldanha, in the Western Cape, was halted on March 13 after people demanding to be part of the project burnt down properties, the South African Forum of Civil Engineering Contractors (Safcec) said in a March 18 letter addressed to Finance Minister Tito Mboweni.

In the first incident, police released the arrested perpetrators and, in the second, public-order officials took three hours to arrive, Safcec said.

The economy and workers’ livelihoods “are the main casualties”, the organisation said.

“No taxes can be collected due to no economic activity taking place. The rule of law needs to be maintained at all times in order not to scare off investors in the sector.”

South Africa’s construction and materials index is down 25% over the past 12 months and the attacks on projects could harm President Cyril Ramaphosa’s efforts to lure $100-billion in investment over five years to revitalize an economy that has not expanded at more than 2% since 2013.

Poor educational skills have constrained the economy, which is struggling with an unemployment rate of almost 28%. The country’s murder rate rose to its highest level in nine years in the 12 months to March last year as a depleted police force struggled to come to grips with violent crime.

The Finance Ministry has received the letter, spokesperson Jabulani Sikhakhane said in an emailed response to questions.

Edited by Bloomberg

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