The South African National Roads Agency Limited (Sanral) and Barloworld Equipment have signed a memorandum of understanding (MoU) that will provide emerging contractors with greater access to Caterpillar equipment.
Barloworld Equipment is the dealer for Caterpillar earthmoving machines and power systems in Southern Africa.
“We are trying to intervene in the market so that we are able to transform the supply system on construction projects,” said Sanral CEO Skhumbuzo Macozoma at the signing of the MoU in Johannesburg on Wednesday.
“This in line with the Preferential Procurement Act, as well as Sanral’s transformation policy. We want to reward people who have taken transformation seriously. This is the focus.
“This will open up the industry to new participants and remove many of the barriers that prevent companies owned by black, women and youth entrepreneurs from competing effectively against entrenched players in the construction sector.”
Macozoma said the MoU will focus on providing qualifying small enterprises and exempt microenterprises, generally level one or two, with access to the equipment necessary to execute road contracts.
Essentially, if one of these companies secures a tender from Sanral, they would need equipment, explained Macozoma. Under this agreement they could approach Barloworld Equipment, indicating that they have a Sanral contract and that they are in need of equipment.
“Barloworld can then facilitate access to this equipment. With Caterpillar Finance and the other financial relationships that they have, we are hoping that Barloworld will assist small, medium-sized and microenterprises (SMMEs) to access better terms for securing equipment.
“If these SMMEs acquire plant, they will also get training, so that they are able to operate the equipment on our projects. Also, if they are working in remote areas and need technical support services, they will be able to call up Barloworld to provide that kind of assistance. This is what we want to achieve with this partnership.”
It is quite difficult for emerging contractors to secure finance if they don’t have the balance sheet, noted Barloworld Equipment Southern Africa CEO Emmy Leeka.
He added that his company was eager to execute the MoU “as soon as possible”.
He said contractors could qualify to buy, rent or rent-to-buy new or used equipment.
“At the end of a project we would like to see the emerging contractors owning these machines.”