Builders in limbo on promised fund

Big projects dry up as sector bleeds jobs

The embattled construction industry is holding its breath that an infrastructure fund announced by President Cyril Ramaphosa last year will soon have tangible results and lead to more work for the sector.

The stimulus package, announced in September, gave hope for a more favourable outlook for the sector when Ramaphosa said that a South
Africa Infrastructure Fund will be established.

“The contribution from the fiscus towards the infrastructure fund over the medium-term expenditure framework period would be in excess of R400-billion, which we will use to leverage additional resources from developmental finance institutions, multilateral development banks and private lenders and investors,” Ramaphosa said at the time.

In the February Budget speech Finance Minister Tito Mboweni said the infrastructure fund is a central pillar of the budget and of reprioritisation, snd will accelerate R526-billion worth of on-budget projects by bringing in the private sector and development finance institutions.

Master Builders Association executive director Mohau Mphomela said the severe downturn in the construction sector that has destroyed much of the capacity of the listed property sector is starting to ravage small and medium contractors.

“Construction is badly affected by low economic growth. If you go around the big cities, you hardly see cranes. That tells you that there is no new work coming forth,” Mphomela said.

According to data from Statistics SA, 44 close corporation in the construction sector were liquidated between January and August.

Even the bigger construction firms have been on their knees since the 2010 infrastructure projects fizzled out. Group Five filed for bankruptcy this year.

Basil Read, Esor and Liviero applied for business rescue last year. Media speculations this week said former Gauteng MEC for economic development Kgosientso Ramokgopa is set to be appointed head of a newly created economic and infrastructure unit in the office of President Cyril Ramaphosa.

This will see Ramokgopa in charge of the infrastructure fund. The office of the Presidency failed to comment.

By Kabelo Khumalo

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