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Government ‘fails on construction mafia’

Construction companies and contractors are desperate for the government to help stop rogue groups from invading building sites and demanding stakes in their projects. “The government needs to intervene with legislation,” said Nicolo Giuricich, director of Giuricich Brothers Construction, which has had a problem at a site in Cape Town.

Construction companies and contractors are desperate for the government to help stop rogue groups from invading building sites and demanding stakes in their projects.

They argue that denouncing criminal groups who cause trouble on sites does nothing material to stop them.

Many workers have become victims of violence and construction groups are forced to hire private security firms costing millions of rand to ensure that projects reach completion.

In his 2020 budget speech, finance minister Tito Mboweni called on communities to expose those behind the hijacking of construction sites. He referred to President Cyril Ramaphosa’s 2020 state of the nation address in which he said extortionist criminal groups targeting construction sites will be dealt with by specialised National Prosecuting Authority units.

But a year later, nothing concrete has been done, says Nicolò Giuricich, director of Giuricich Brothers Construction.

“The government needs to intervene with legislation. Construction companies operate on thin margins. We had a number of run-ins with these construction mafias before lockdown and decided it was best to hire security consultants. This cost us a lot of money but we had to go through with it and add it to the cost of each project,” he says.

His company had a problem at a site in Cape Town when building material was stopped from arriving on site.

Giuricich Brothers Construction is one of hundreds of members of the Master Builders SA (MBSA), a national representative body in the building and construction industry.

MBSA has been in talks with the police and various government departments.

MBSA executive director Roy Mnisi says if the police can make more arrests, criminals will be dissuaded from interfering in construction projects. Many construction companies employ people from local communities but some still argue the sector is not transformed enough.

“Since 2016, these construction mafias have been causing chaos on building sites. They call themselves business forums purporting to represent communities. But they are thugs who want to get enriched from projects for free,” Mnisi says.

The harassment of building contractors began in KwaZuluNatal and then spread to economic centres in Gauteng and the Western Cape.

KwaZulu-Natal “is a large province where a lot of construction work has been going on in recent years, especially infrastructure work. A problem has been that construction groups struggle to find skilled workers in the province and so they have to use people from other countries”, he says.

According to Mnisi, many jobless, unskilled South Africans believe large construction projects are in the public eye, and feel that if they intimidate people working on-site, the government will notice their pain.

“The government might then take steps to create work for them and to provide better services,” Mnisi says.

Giuricich says by law 30% of the work in a state project must be sourced locally. This can be done successfully with such projects, as they tend to have longer development timelines.

“You want to keep the community involved. It’s the right thing to do. It’s easier to do this with government projects where there is more room for losses. Private work … needs to be built on strict timelines and profit margins are tight. Your developer is your client and they have shareholders to please,” Giuricich says.

“The quality of workmanship can take a knock. There is a serious shortage of skilled artisans. Our artisan training colleges no longer exist. We try to teach skills where we can,” he says.

The government has promised that infrastructure projects will drive the country’s recovery after the pandemic.

One of the few remaining listed construction companies, Wilson Bayly Holmes Ovcon (WBHO), said in March that it was seeing new projects come to tender after years.

“It has taken time but we are finally seeing a turnaround in the availability of infrastructure work. We have seen a marked improvement in roads and civil work,” CEO Wolfgang Neff said.

“There is also a lot of tender activity in the mining sector as well as for renewable projects.”

In recent years former construction giants Esor, Basil Read and Group Five have collapsed, citing a lack of state infrastructure work after the 2010 Fifa World Cup. A number of their projects had also been derailed by construction mafias.

Mnisi says that the government should show that it is serious about promoting the construction industry, which has plans for job creation and creating opportunities, by taking steps to punish criminals.

Giuricich says the country needs viable projects to kickstart the economy and these cannot go ahead if workers’ safety is not guaranteed.

“If we can restrict the mafias, that will help keep construction skills in SA. Right now too many people are leaving for places where they know they can work safely,” he says.