Rectification of substandard construction work on many of the low-cost housing projects throughout South Africa has left the State with a bill of about R50-billion, said Human Settlements Minister Tokyo Sexwale on Thursday.

As a result of this, he again posed the question of whether it was time to establish a State-owned construction company to undertake the many housing projects in the country.

However, he stressed that the concept was not set in stone and he wanted to engage the construction industry in debates for possible solutions to the subpar-construction challenge.

Sexwale also noted that a State-owned construction entity need not be 100% controlled, or even run by the State.

The department would continue analysing other countries that have successfully established State construction companies and examine its relevancy to South Africa.

“If it [the concept] works, we will move ahead; if it doesn’t we will scrap it,” he commented.

Speaking at a construction sector breakfast, Sexwale said he was hesitant to spend any of the R25-billion set aside in his budget for housing projects until the issue of substandard work was resolved and he received certain assurances from the sector.

The Minister said that, based on the fact that an upsurge in infrastructure spend in the run-up to the FIFA World Cup in 2010 lessened the impact on South Africa of global economic instability, the government’s R850-billion plan to develop infrastructure would play an important role in further cushioning South Africa from international economic instability. He added that low-cost housing developments were a significant part of this.

“We have to give the country a fighting chance not to fall like the other countries.”

Inexperienced, less-than-credible “shovel, wheelbarrow and bakkie brigade” construction groups involved in the tenders for government's housing programmes were delivering “shoddy” workmanship and many of their constructions were falling apart.

Black economic-empowerment was not a licence to deliver substandard or poor-quality work, he said.

Sexwale reported that there were about 2 000 people at national level which were believed to be involved in corruption and the awarding of tenders before many had a chance to bid. But it did take two to tango, he noted, adding that this was something the department was looking into.

He believed that involving a few of the large, more credible established and competent players in South Africa, and even internationally, in the low-cost housing projects, and their partnerships with the smaller, genuine and committed, albeit inexperienced, or capacity-strained, companies, would go a long way in ensuring quality work, while transferring skills.

Sexwale also pointed out that many options were available to shape up the low-cost housing-construction sector but engagement with the industry would produce many more.

Delegates at the industry breakfast suggested the need for an investigation into the root cause of these challenges and deal with them instead of treating the symptoms – as one delegate suggested the concept of the State-owned construction company would do.

Monitoring systems and the blacklisting of fly-by-night contractors were some of the suggestions that emerged from the meeting.

Others commented on a number of issues in the industry, including unclear building specifications, the lack of sufficient and competent inspectors for large contracts, lack of partnerships, the need for training centres and skills transfer, poor-quality material, and continued lack of implementation of ever-mounting policies and regulations.