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Home » Industry News » Building, Construction, Infrastructure & Development » The story of SA’s procurement crisis

The story of SA’s procurement crisis

How the frogs and canaries have long since died and Rome continues to burn

By Deon van Zyl, Chairperson, Western Cape Property Development Forum

While a handful of largely business media may have briefly covered the recent SANRAL procurement debacle, the crisis around pit latrines gets covered in the popular press on an almost daily basis. And rightly so, because it is a horrific situation. 
But how is it that all media – business, financial, popular and the like – have not yet been able to link that dangerous pit latrines and roads falling apart are part of the same headline that should be shouted at government daily: how its inability to procure let alone deliver on infrastructure is quite literally seeing our country collapse, physically and economically.
 
And it’s been happening for decades. Forget about the proverbial frog in the boiling water that’s been getting progressively hotter. The frog’s fried and the water’s evaporated. And it seems we’ve been so fascinated with our crisis post the 2008 credit crunch that we never stopped to fix the problem.
 
Infrastructure and in particular the essential procurement thereof just do not seem to be press-sexy enough. And yet it is the primary reason why so many of our municipalities are in disarray with both their finances and the delivery of even the most basic of services to their communities. How are the media not getting this and shouting it from every rooftop? And where is the public indignation and demand on government from all quarters of society?  To the politicians out there: if your officials are not procuring, you cannot deliver on your promises.
 
As the property development and construction industry, we certainly saw the depth of the procurement crisis again recently when Statistics SA launched its most recent 2020 Report on the Construction Industry. For now, let’s  look at just some of what this 2020 report revealed. For example:

  • There were 118 000 job losses (amounting to 25% of all persons employed in the industry nationwide) between June 2017 and June 2020. Many of these jobs were lost in civil engineering construction companies.  
  • The total income of the industry decreased by 7.1% in the same period.
  • The profit margin decreased over the same period from 3.5% to 2.2%. (And, yes: two-point-two percent profit. This is not even close to the two-digit realm that most perceive our industry to fall into.)

Now, let’s bear in mind that this was a 2020 report – pre-pandemic; so let’s not even mention how much more dire the situation is now.
 
And the saddest thing? It appears that – other than one article written by IOL journalist, Mwangi Githawi (among the few media that actually attended the Stats SA press event launching this publication) – the report hardly made a ripple in the news.
 
This in spite of the fact that Joe de Beer, the DDG: Economic Statistics at Stats SA – when asked to comment on the reason for the decline at the press launch – noted that it could most likely be attributed to government’s inability to spend money: IE: it’s inability to procure over an extended period of time.
 
How is it, in turn, that the Auditor General’s office is still only too keen to congratulate a municipality on not overspending, but does not take it severely to task for underspending  especially on capital projects?
 
The lack of government’s ability to procure nationally, regionally and locally has been so chronically ill for so long that the canary in the coal mine died years ago; indeed the SANRAL debacle should be seen as a ghostly murmuration of epic proportions that now hovers continually above our heads, darkening the horizon. A giant shadow of the countless jobs that have died over the years. And then we wonder why the “Men at the Side of the Road” have grown into armies – rank upon rank now standing there.
 
In the construction industry, government – and government alone – has caused joblessness, homelessness and bankruptcy upon bankruptcy. Not the pandemic. Not the poor rand. The latest Stats SA Report confirms this as clearly evident since 2017. And still the fiddlers fiddle while Rome burns.
 
Think about it: if even a small percentage of the billions of infrastructure projects that have been promised for years had started to be rolled out pre-pandemic, the worst that would have happened to the thousands of construction workers who could have been working on these, is that their livelihoods would have stopped for three months.
 
Why three months? This is the time it took for organisations such as the Construction Alliance South Africa (of which the WCPDF is a founding member) to fight for lockdown to be eased enough to allow crews back on sites that did exist at the time.
 
And yes, three months is still a lifetime in the home of a wage earner. But consider instead that well over 100 000 wage earners have now sat unemployed, in their thousands upon thousands, for years. All thanks to government’s inability to tender successfully, make a decision and implement an infrastructure project that’s already been budgeted for. Be it a pit latrine or a road.

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