The South African Forum of Civil Engineering Contractors, together with national government, on Tuesday signed an agreement with several construction companies, including Wilson Bayly Holmes-Ovcon (WBHO), Aveng, Murray & Roberts, Group Five, Basil Read, Raubex and Stefanutti Stocks, to accelerate transformation in the industry.

The Voluntary Rebuild Programme agreement will see the parties – which were involved in collusion recently uncovered by the Competition Commission – collectively make a contribution of R1.5-billion over 12 years to a social and economic development fund. This will be in addition to the R1.4-billion in administrative penalties already imposed by the competition authorities.

Overseen by Rural Development and Land Reform Minister Gugile Nkwinti, Transport Minister Dipuo Peters, Economic Development Minister Ebrahim Patel, Public Works Minister Thulas Nxesi and the construction companies’ CEOs, the agreement will also see each company committing to having at least 40% of equity in the hands of black South Africans, or commit to initiatives that will result in each of the construction companies mentoring up to three emerging black-owned enterprises to develop their skills.

This development needs to sustain a cumulative combined yearly revenue equal to at least 25% of each of the mentor companies’ yearly revenue by 2023.

The Construction Industry Development Board (CIDB) welcomed the agreement, with acting CEO Hlengiwe Khumalo noting that it embodied the principles of development and growth in the emerging sector, which were in line with the CIDB’s legislative mandate to advance the nation’s social and economic development objectives.

Following the declaration, Stefanutti Stocks CEO Willie Meyburgh and WBHO CEO Louwtjie Nel told Engineering News Online that the time had come to move past the collusion case and build the local industry.

Nel revealed that the construction companies had originally initiated the agreement. “We stated that government and business could either be engaged in this litigation for a very long time, which would have significant financial impacts and lead to a negative domestic growth period, or it could be turned into a win-win situation.”

Nel added that the construction companies aimed to add “a positive stride” to the industry by investing in skills development and furthering transformation.

Meyburgh highlighted the wealth of potential that lay ahead through collaborative efforts with government and contractors and said that focusing on the past was not beneficial.

Meanwhile, Nxesi told Engineering News Online that the collusion exposed many weaknesses in the legislative framework in terms of regulating industry. “There is a need for revision to prevent future cases.”

He added that, as his department oversees a number of significant tenders in South Africa, companies needed to understand that there would be “serious implications” for involvement in collusion.

Nxesi concluded that the Voluntary Rebuild Programme agreement could be applied in other economic nodes, such as the property sector, where the issue of overpricing was prevalent.