The prospects of black economic empowerment (BEE) in the construction industry received a boost with the enactment of a sector-focused transformation charter in February last year. The charter was enacted as a section 12 transformation document.
The sector is now pursuing section 9 status, which will turn the charter into a legally binding document alongside the codes.
Faced with unique challenges, the construction sector has lagged other sections of the economy on transformation. The charter, endorsed by all relevant stakeholders and most importantly the industry bodies, is a step in the right direction. But then it has been clear for some time that transformation in the industry will flourish or founder on the issue of education and training.
That much is reflected in the dismal score in employment equity and management produced by construction firms in this Top Empowerment Companies (TEC) survey. The leading company in the sector on empowerment credentials, Aveng, managed to score 2,4 out of a possible 10 points in the representation of black people at management level and 1,9 out of 15 in employment equity.
Newly listed Raubex Group, which takes the second-most empowered spot in the sector scores 1,29 on management and 1,68 on employment equity. Third-placed Group Five got 1,84 on management and 2,14 on employment equity.
It is no secret, nor is it an embarrassing fact, that the mathematically based skills required by companies like Aveng are scarce within the black section of the SA population. That is due to SA's political history. Put together with the lengthy decline of business activity experienced by the sector, prior to the ensuing boom, the country's technical skills base was depleted.
With diminishing investment, companies in this sector virtually halted onsite training (artisans), which had served as a critical skills pipeline for the entire sector.
The figures speak for themselves. Numbers taken from the SA Institute of Civil Engineers (SAICE) show that SA has only one engineer for every 3 200 citizens, which is a 10-20 fold disadvantage. Australia, Western Europe, China and India boast one engineer for every 130-500 people. The racial interrogation of this ratio is frightening - there is one white engineer for every 300 white people in the country; and only one black engineer for every 50 000 black people.
The few black engineers and qualified construction professionals have usually migrated to more sexy industries. Most of them are engineering financial deals instead of building bridges.
SA is running short of artisans. The total number of artisans has dropped from about 30 000 in 1975, to an estimated 3 000.
The recent upswing in infrastructure development expenditure led by the public sector has exposed the country's weakness.
"I don't think we are doing enough as a country to close the skills gap, let alone to address the racial imbalances on this area," says Aveng CEO Carl Grim. "We have to double our efforts to meet this challenge effectively. We need a higher level of co-operation between the public and private sectors, and we also need to set up programmes to ensure that the syllabus at school level is appropriate for the requirements of the industry."
A number of initiatives have been put in place in the past few months. These include government's Joint Initiative on Priority Skills Acquisition (Jipsa) and the charter.
The charter does place some emphasis on skills development. The charter means that enterprises in the sector have committed to boost their skills development initiatives, including on-site training and a contribution to bursary schemes. The charter sets a minimum target of 1,5% of payroll, thereby reinforcing the Skills Development Act, which imposed a levy. The charter states that a minimum of 70% skills development spend should benefit black candidates and 25% should benefit black women. The charter adds that 25% of skills spend should be dedicated to developing black skills at management level. The same emphasis is placed on the revival of learnerships.
Listed construction groups have registered significant progress on the ownership factor of the BEE scorecard. That is reflected in this TEC survey. Aveng claims 23 points on the ownership factor reflecting three bonus points. New kid on the block Raubex scored 21,35 ownership points while third-placed Group Five managed 17,17. Raubex and Group Five produced total BEE scores of 59,6 and 55,27 respectively.
