Why do we see a trend in businesses forums?
Entrepreneurs convene through business forums to exchange ideas and views. They seek to protect the interests of its members in obedience to the law.
Forums ought to assist businesses expand, connect and stay motivated. They should expose businesses to information, innovative methods of production and strategic and economic ways to procurement.
For them to have a meaningful impact, they should mimic well known forums such the Commonwealth, World Economic Forum and Economic Forum on Africa. Their role should promote asset building and exchange of skills and knowledge among themselves. Their members should enjoy the benefits of a network of other businesses and be inspired regularly by the testimonies of their associates.
The emergence of small business forums in South Africa is a result of black owned businesses claiming their rightful space in the business environment. They have become particularly relevant in recent years as the need to empower black businesses rises.
The South African government emphasises the need for this through its various acts and regulations including the Broad-Based Black Economic Empowerment (B-BBEE) and the Preferential Procurement Policy Framework Act (PPPFA).
It has also made provisions for remedying unfair procedures and the commitment of fraudulent and corrupt behaviour in its Promotion of Administrative Justice Act (PAJA) and the Prevention and Combatting Corrupt Activities Act (PCCA).
The construction industry is not exempt from the abovementioned legislative provisions. The government is the industry’s major client, meaning that it has the power to influence every aspect of construction. As a client of the construction industry, the governement can help shape what, where and how construction is undertaken.
Being a major contributor to the growth of the economy, the government of South Africa has many other responsibilities. It has to create jobs and also unlcok business opportunies for historically disadvantaged individuals (HDI’s), to rectify the injustices of the past. Furthermore it is responsible for the provision of infrastructure and services to its citizens, prioritizng the poor and disadvantaged.
The South African government is in its transitionary phase and has committed itself to a mammoth task. It is not surprising then, that its service delivery sector is faced with many challenges. It is not only held responsible for the abovementioned, but is accountable for the formulation and implementation of policies. These are policies that aim to redress the past injustices to reflect a fair, unprejudiced, equal and equitable economic climate.
Investor confidence rises with government investing in its own infrastructure, and this leads to economic growth. It develops infrastructure to provide quality life to its citizens and as a means to create jobs. It applied its laws and policies to ensure that HDI’s are given preferential treatment when participating in the economy and that remedial action is in place in the if that they unfairly treated.
In 2016, 30% of the government spend in infrastructure went to General Building while 70% was spent on Civil Engineering activities. These statistics and other public infrastructure information are provided by the Construction Industry Development Board (CIDB) which is published quartely as a way to monitor the industry.
Civil engineering projects are typically of high value and by their nature cannot be subdivided or awarded in sections. They require highly skilled personnel, technically competent individuals and organisations that are financially able to undertake these projects.
The CIDB categorises organisations with such characteristics, on a higher grade in the register of contractors, where there is very few of them, with little competition relative to the lower grades. These firms not only meet the criteria but also have the capacity to undertake most civil engineering projects. They are well established firms with experienced operational systems to meet the needs of such projects.
Unfortunately these are firms that have been long established and have an advantage over new emerging contractors. Their human resource composition does not reflect the objectives of a new South Arica therefore by their nature, are not in line with the governments attempts to redress past injustices.
This leaves the government in a predicament where it has to develop adequate, safe and durable infrastructure, and at the same time level the playing field, develop capabilitues, and encourage growth. This dilemma has led to occurrence of obstructions towards reaching its goals.
The disruption of construction projects while in progress has become popular in the coutry, has multiple effects on a variety of stakeholders and far reaching consequences in the industry in general.
One of the obstructions include business forums representing emerging contractors. They obstruct the commencement of construction projects and bring works to a standstill at whatever cost. This has driven down investor confidence, deprived the jobless of job opportunities and created instability in communities. All this makes government regress in what they have accomplished so far.
When construction projects are violently disrupted it becomes a safety hazard to the people employed and has time and cost implications to the project. The project is not delivered in the desired time frame, and the end users, usually the poor and disadvantaged, end up on the receiving end of this.
In a case where a contractor has already been appointed, the work stoppages entitle the contractor additional time and money as provided by most standard agreements. All of this is passed on to the government as the client and essentially the tax payer.
The business forums have formed because they believe that they are not awarded contracts and it deprives them of an opportunity to earn income and expand their organisations.
They say that the bureaucracy involved in the tender process is designed to exclude them from participation. They view that the procurement policies are manipulated to favour certain individuals and have lost confidence or are unaware of the remedial acts and regulations in place to deal with such issues.
Their impatience with the slow pace of transformation has led an approach that has criminal elements and lawlessness. They have taken the law into their own hands and have adopted an aggressive approach that can only be seen as a cry for intervention. All it will continue to do is encourage criminality, threaten security and further perpetuate the cycle of poor living conditions and poverty in general.
Fortunately for the government, all of its objectives and challenges are not isolated and should be studied from a holistic point of view. For it to deliver standard infrastructure, it will need competent, skilled and capable personnel. If these individuals are to be involved in or charged with the capacity to deliver these projects, they will have to be trained and skilled.
If the government wants to realised its objective of having PDI’s contract for these type projects, it’ll need to develop their capacities not only to be able to fairly compete with their counterparts, but to also produce standard and quality products and services.
To see investor confidence grow, the government will have to deal with the instability by employing law enforcement agents to secure the perpetrators of violence, threats of intimidation and extortion. It will have to make their procurement policies taut and less likely to be manipulated.
The government should also be held responsible for educating the public on the various acts governing actions that are deemed to be unfair, fraudulent and corrupt and of the remedial options the public has at their disposal.
The economic growth and job creation of the country should not be the responsibility of the government alone. The private sector, composed mostly of these established firms, should play their role in training, equipping and developing PDI’s. They shouldn’t just do the minimal to comply with regulations and should be punished, penalised and even barred from participation for non-compliance.
The business forums representing emerging contractors should also re-examine and prioritize their objectives. Their focus should not solely be on securing government contracts but preparing their members to provide quality products and services. They should expose them to networks and connect them to a broader market. They should keep them informed on the development of technological processes.
If they do not cultivate and breed their own members, they would’ve failed in ensuring opportunities for their these. So the leaders in these business forums should actually ask themselves what their really doing for their constituents.