The role of the public sector has featured prominently in all the preceding chapters. These highlight the need for the rapid development of capacity and greater management flexibility if Government's delivery objectives are to be attained.
This Chapter therefore focuses on particular aspects of Government's enabling role and its capacity to perform that role. Specifically, it focuses on:
In the context of a society in which the majority of our population is alienated from land and the resources necessary for survival, the rights to life and human dignity depend on immediate employment and development opportunity.
South Africa's past resulted in the marginalisation and extreme impoverishment of many of South Africa's people and communities. In particular, rural communities and women have been disempowered. The State has therefore prioritised delivery to target and address such impoverishment and disempowerment.
While the central strategic thrust of the growth and development of the construction industry contains the key to sustainable employment and human-resource development, this thrust will only yield results over a sustained period. Until long-term improvement is achieved across the industry and the economy more generally, public-sector delivery - particularly public works programmes - to target the marginalised will continue to be part of Government's enabling strategy.
Public-sector delivery will aim to maximise employment opportunities through labour-intensive construction, and to empower communities through participation and training.
Several problems are associated with community participation and labour-based construction targeted to marginalised communities, namely:
Job creation and community-empowerment programmes will be promoted in a manner that will:
In terms of the cost trade-off between labour versus plant-based projects, the State will balance the imperative for increased job creation against the need to deliver construction goods and services in a cost-effective manner. However, a strict cost comparison of the different construction delivery models will fail to take account of the cost of reduced poverty, associated welfare demands and crime reduction.
The above principles have been incorporated in the Framework for Labour Intensive Construction in Civil Engineering Projects. A number of State departments have endorsed this framework and will continue to develop it in conjunction with community and labour groups through the Community-Based Public Works (CBPWP) and other public-sector programmes.
To create better design and implementation capacity, and the wider use of labour-based construction methods, the Department of Public Works has evaluated 13 pilot projects worth R134 million to produce a set of Guidelines for enhancing employment opportunities in the delivery of infrastructure projects. It has initiated a process to refine these guidelines in consultation with line-function departments, provincial agencies and the industry at large.
This industry-endorsed product will be widely disseminated and promoted. The DPW will continue to monitor progress on implementation and will periodically convene all stakeholders to evaluate and update the guidelines.
The sustainability of jobs created can be enhanced through several approaches and the NPWP will promote the following:
Through the Community-Based Public Works Programme (CBPWP), and in execution of its line function activities, the Department of Public Works will promote the principles, ethos and methodology of a people-centred delivery process throughout the public sector. In so doing, the Department of Public Works believes that it will also impact on the practice of the private sector.
Judged by the International Labour Organisation (ILO) to be the leading public works programme in over 30 developing countries, the CBPWP has focused on empowering and building capacity in historically marginalised but particularly rural communities.
In addition to the job-creation potential of infrastructure delivery, the new, realigned CBPWP targets the delivery of productive assets such as irrigation schemes, community culture and tourism. This approach, together with a clustered concentration of activity, has been adopted in order to maximise the job-creation and development impact.
Community participation and empowerment must be facilitated - and in this sense facilitation becomes a central delivery component which transforms the nature of project management. Facilitators must achieve practical understanding of the project and of the respective roles of project participants. They must forge solidarity and enable the participants to perform their respective functions effectively during the often difficult process of implementation.
It is thus essential that built environment professionals and public-sector project managers should augment their project management skills by an understanding of facilitation. Through the delivery of the CBPWP, the development of capacity is being facilitated by the national department in co-operation with provincial departments. This co-operation provides a sound basis for reinforcing the capacity of local authorities to assume greater responsibility for process-related facilitation of projects which fall within their jurisdiction.
The attainment of this and other socio-economic objectives forms part of a public-sector project management course described later in this chapter. In collaboration with tertiary institutions the DPW will promote the incorporation of these project-management requirements into the curricula of the built-environment professions.
Within the scope of the National Public Works Programme, a system of monitoring and evaluation is being established to ensure effective promotion of job creation and community-empowerment programmes. This requires input at a project level by both professionals and public-sector agencies.
The NPWP will convene post-job reviews of selected public-sector projects to assess performance indicators on job-creation, training, the targeting of local resources and capacity-building in order to recommend modifications on future contracts.
Our current regulatory framework is outmoded and unnecessarily complex. As such it often acts to retard delivery, to increase costs to the industry and the public, and to restrict participation in the delivery process.
Regulation is a necessity that generally serves to protect public interests and those of the weaker sectors of society. In relation to the construction industry it is also essentially about defining and limiting the risks associated with the construction process, and about compliance with contractual provisions and specifications. The nature of these requirements is not always in line with what is essential to ensure appropriate delivery and an adequate product.
Regulation affecting the industry is to be found in at least 13 Acts of Parliament, a range of Provincial Ordinances and public-sector regulations, all of which are administered by different authorities. Broadly summarised, the complex and sometimes contradictory nature of this regulation covers the following:
Public-sector regulation, intended to ensure accountability, is often unresponsive to innovation and the dynamic needs of South Africa's development agenda.
Tendering practice, governed by the State and Provincial Tender Boards, currently shifts the onus of responsibility away from those most competent to assess the issues. From simple procurement issues to the highly complex arena of construction procurement, decisions are governed by regulation, which often leads to poor quality, wasteful expenditure and, even worse, paralysis.
There are significant variations in the practices of different Departments, Provinces and local authorities. These relate to regulation, the use of different forms of contract documentation, and payment procedures. For contractors and labour, working for more than one authority, these variations compound the complexity of implementation.
Procedures generally make it difficult for the private contractor to respond effectively or prepare adequately to carry out works efficiently and quickly. Delayed payment impacts significantly on contractors and professionals.
Procurement through tendering practice in South Africa is based on the British model, which is generally a worldwide practice. While the system aims at equitable assignments, transparency and the effective use of resources, it is considered by many to be archaic and overly complex.
The industry has no common base set of contract documents. Many existing contractual arrangements include onerous requirements which are not in fact prescribed by law or decree. These include document and performance deposits, tardy payments, and over-elaborate documentation.
Technical legislation generally relates to specifications and standards which are considered necessary by stakeholders. The control of standards of materials and the formulation of codes of practice are essential as public safeguards, and must be maintained. However, the relevance of various standards requires constant review in the light of rapid technological advances and changing societal norms.
Industry self-regulating mechanisms include representative employer associations which are prolific in their nature and organisational form.
Within the built-environment professions, formal self-regulation is exercised by relevant statutory councils controlling the different built-environment professions. The councils are responsible for the conduct of professionals who are registered and include in their functions the monitoring of ethical codes of professional behaviour, in the interest of the public as well as the professions.
Unfortunately, communication between these various statutory and non-statutory bodies is limited.
The public sector will support the removal of regulatory impediments and the streamlining of the regulatory framework to contribute to an enabling environment and reduce costs to both industry and clients.
Past attempts to promote nationally greater levels of procurement standardisation have met with limited success, due to a non-systematic approach and the absence of effective public- and private-sector co-ordination.
Some archaic regulatory practices and institutions are entrenched by legislation. While some of this legislation is being radically overhauled within the framework of the current transformation process, the ability of the construction industry to impact on legislation affecting it is limited by the absence of a recognised authority which represents all industry interests and binds the public and private sector.
This endeavour to remove regulatory impediments and to streamline the regulatory environment will require close interaction with the industry and between spheres of Government. A review of the regulatory environment should be guided by certain principles.
It should:
In promoting an appropriate degree of regulation, Government is also seeking to create an environment which defines a level of standards suitable to the industry. In this endeavour, it will seek to define standards that are appropriate to specific sectors of the construction economy - even to the extent of defining different standards for different sectors of the market. Nevertheless, in defining these standards, Government will be guided through its interaction with industry to ensure that the long-term growth and development of the industry will be promoted.
A detailed review of the regulatory environment will be commissioned under the direction of the Construction Industry Development Board (CIDB), the Department of Public Works and other affected Government agencies.
The review will need to be systematic, multifaceted and ongoing. The active involvement of the CIDB will enable industry input and ensure that recommended standards and procedures are appropriate to specific sectors of the construction economy and to the promotion of long-term growth and development.
Work already initiated includes a review of payment procedures undertaken by the Department of Public Works and supported by the Inter-ministerial Task Team on Construction Industry Development. This endeavour to remove regulatory impediments and to streamline the regulatory environment will require close interaction with the industry and between spheres of Government.
Currently contractors must be registered with five different organisations before they can access subsidised training - which can be very onerous on SMEs. To assist SMEs in this task, a single agency, such as the Construction Industry Development Board (CIDB) or the Emerging Contractor Development Programme (ECDP), will be tasked with promoting assistance to SMEs in such registration. The objective of a "one-stop" service will be coupled with a registration and formalisation drive for all relevant SMEs.
An overarching Council for the Built Environment is being established by Government as a co-ordinating structure for the professions in the built environment, with certain functions relating to national policy and legislation, such as:
The envisaged Construction Industry Development Board (CIDB), coupled with an overarching Council for the Built Environment Professions, would support an ongoing review of regulation to create an enabling regulatory framework.
The lack of public-sector capacity to manage the procurement and service delivery process has become a growing concern in Government and industry circles. The new Constitution, defining new functions and institutions ranging from national departments, provinces and local authorities, has further complicated the already difficult task of implementing policy, causing delays while new agencies and personnel get established.
This lack of experience in the delivery of line-function goals and services is undermining the position of the public sector as a knowledgeable and expert client. Ultimately, the inability to manage delivery reflects poorly on the image of Government, undermines its policy objectives and inhibits the development and transformation of the Industry.
Rapid development of Government capacity is required to ensure effective management of the delivery process and impact on the regulatory framework in a way that supports an enabling delivery environment.
In the process of transformation, public-sector agencies are still having to contend with problems identified in the White Paper on the Transformation of the Public Service.
These include:
While many of these problems concern the internal workings of Government, they also affect the way in which Departments interact and serve the general public.
For Government agencies involved in the procurement of infrastructure, the above constraints further manifest themselves in Government's expanded role as a client interacting in specialised relationships with contractors, consultants and the broader public.
In its specialist role as client to the industry, the public sector faces additional constraints. These include:
The right-sizing and re-engineering of the public service agencies involved in infrastructure procurement must be accompanied by a corresponding upgrading of skills to manage an increased private-sector role in the delivery process. Government's role in the process must therefore be reoriented towards:
Human-resource development will need to encompass the specialised skills of procurement and project management, and would benefit from the expertise and capacity available in the private sector. Human-resource development programmes would also need to involve the professional bodies and tertiary institutions.
A review of management practice and regulation in the public sector will enable greater devolution of managerial autonomy, as well as innovation and responsiveness to delivery demands, and must be accompanied by alternative mechanisms to ensure accountability.The ongoing promotion of public-sector project-management capacity requires a co-ordinated focus within Government and close co-operation with industry.
There is a need for both immediate and medium-term measures to develop public-sector procurement capacity and project-management skills.
In the fulfilment of the transformation goals set out in its White Paper, Public Works Towards the 21st Century, the DPW has initiated a number of programmes to spearhead public-sector capacity-building, aimed at enhancing procurement expertise and project-management skills. The DPW has developed project-management systems and an internal Project Management Manual, and has also engaged with the professions and tertiary institutions to develop a short guide to public-sector project management.
Accompanied by a seminar programme involving private-sector delivery agents, this approach will serve to boost all spheres of public-sector performance in the short term, and help to crystallise an understanding of the delivery problems faced on the ground.
As a medium-term measure, the DPW, in co-operation with tertiary and research institutions, has initiated the planning of a diploma course in public-sector project management. Plans for the further development of this course include its expansion to degree level.
In co-operation with the CIDB, the DPW and other infrastructure-delivery departments will promote the need for public-sector officials, engaged at certain levels of the delivery process, to be accredited in terms of this programme.
While the public sector ultimately retains responsibility for developing and monitoring its own human-resource development programmes, the CIDB will assist by providing both cross-sectoral input to such programmes and valuable private-sector understanding of the parameters of the disciplines involved.
There is need for a positive response to the readiness of the private sector to assist in overcoming current capacity constraints, which impede delivery.
To do so, the public sector needs to revise cumbersome secondment procedures which defeat the purpose they are intended for - namely the speedy enlistment of private-sector skills in a management and mentoring role.
In co-operation with the professions and relevant Government departments, the DPW will develop appropriate secondment procedures to replace current regulation.
The ongoing improvement of public-sector capacity will require co-ordination and the co-operation of all public- and private-sector participants in the delivery of infrastructure. The proposed CIDB will provide a recognised and authoritative national centre for the pursuit, co-ordination and monitoring of initiatives.
Enhanced industry performance, capacity and competitiveness cannot be seen in isolation from the subregional arena and the tendency towards globalisation. In the subregional context, industry practice is closely related to the developmental objectives of our own country, as well as those of our neighbours. Co-operation is important to ensure a common development and operating environment which fosters industry progress.
Inequalities in the region, such as the skewed distribution of wealth and of the resources to generate wealth, give rise to poverty, unemployment and social and physical debilitation in these countries. These problems have not confined themselves to the neighbouring states, but migrate to South Africa to add to the already critical situation here. Therefore Government's socio-economic strategy will only succeed in South Africa if it helps bring about transformation in the region as well.
Given the dramatic increase in construction supply required by Government's socio-economic objectives, and given the capacity constraints facing the South African construction industry, neighbouring countries might find their construction sectors depleted of appropriate skills as technical, supervisory and managerial staff seek better opportunities in South Africa.
Some construction companies in South Africa have used labour-only subcontracting to circumvent existing industrial agreements. Some South African companies further circumvent these agreements by employing "illegal migrants" from neighbouring countries who are too vulnerable to object to difficult working conditions or rates of pay. Similarly, when contracting in the neighbouring countries, these companies employ people under considerably worse conditions than would be acceptable in SA.
Neighbouring economies derive a large proportion of their construction materials from South Africa. Although South Africa has a sophisticated manufacturing industry, which supplies almost all the requirements of the construction sector, successive recessions have caused manufacturers to significantly downscale their operations since the mid-1980s. In the light of the intention to escalate delivery, the concern of regional partners that key construction materials may be in short supply is not unreasonable.
The advantages of greater regional integration - providing larger markets and shared resources and creating economies of scale that will enhance the international competitiveness of the construction sector - must be recognised. On the other hand, unless a serious commitment is made to address regional inequalities, the benefits of growth in South Africa will be short-lived. Further polarisation is likely to exacerbate the structural weaknesses of the economies of the region.
The adoption of World Trade Organization (WTO) trade protocols by South Africa has accelerated the involvement of South African business beyond our borders. Already, many South African companies have found markets in the regional economy. Although not as many companies from the neighbouring states have found work in South Africa, trade liberalisation could result in the further flow of construction resources towards South Africa, thus exacerbating the maldistribution of those resources within the region.
It should not be concluded, however, that greater regional and international trade in construction goods and services should be discouraged. Instead, industry should prepare for the inevitability of increased competition and should actively promote industry performance as new techniques and technologies are introduced locally.
On the other hand, support should be mobilised for best-practice South African firms to export their goods and services.
As signalled in the Southern African Construction Industry Initiative (SACII) declaration of intent in 1996, Government endorses the development of a common framework for the construction industries of the region, which will: * open the construction markets in the region to the mutual benefit of all participating countries;
It has become clear since the Second Regional Seminar of the SACII that, notwithstanding the enthusiasm of participants, there are limited resources with which to take forward the initiative of establishing a common development and operating environment.
There is also some indication that not all regional governments have shown the same degree of commitment to the declaration of intent as the South African Government. It may therefore take a number of years before the declaration of intent is fully operationalised.
Further constraints include the shortage of skills and experienced personnel in the region, as well as the maldistribution of construction materials and potential shortages.
An enabling regional policy should aim to attain the following common objectives:
The Department of Public Works, together with the Construction Industry Development Board, and in co-operation with relevant Departments and the private sector, will continue to promote regional co-operation and the international competitiveness of the industry. Establishing a common development and operating environment requires that intent be translated into action through the accomplishment of the following:
Agreements on the above issues will take place within the ambit of the Southern African Development Community (SADC), which is the vehicle to ensure a co-ordinated policy for the region. These agreements would need to be negotiated in close consultation between infrastructure delivery departments and the Department of Trade and Industry, which is responsible for general regional trade and development policy. Within the framework of co-operation established by the Inter-ministerial Committee, the DPW will facilitate any necessary co-ordination to promote common approaches. Government policy further encourages provincial government departments to prepare regional policies within their line-function responsibilities, in which their "individual contributions towards the promotion of balanced growth and prosperity for the region are clearly stated'. In line with the requirement to maintain a co-ordinated approach towards SADC, the DPW will provide a sectoral contact point for provincial governments to co-ordinate interaction with their neighbouring SADC member states on construction-related issues.
The Construction Industry Development Board will promote industry involvement in such regional initiatives. It will advise the Inter-ministerial Committee on the formulation, implementation and possible updating of any regional agreements established by Government and will play a critical role in promoting new technology and the international competitiveness of the industry.
The proposals encapsulated in this document place a spectrum of responsibilities on both the public and private sectors of industry. However, in an overarching sense, some key institutional arrangements must be put in place, primarily by the State, to create an appropriate enabling environment for the South African construction industry of the future.
The institutional arrangements described here are based on four principles that stress the need for a co-ordinated approach to enabling environment programmes, for programme im-plementation which appropriately involves all stakeholders, and for ongoing evaluation of the effectiveness of the actions taken to achieve this.
The principles can be summarised as follows:
In order to implement programmes which address the volatility of demand, improved industry performance, the capacity of the emerging sector, human-resource development, a streamlined regulatory framework and enhanced Government capacity to manage delivery, Government will establish, promote and strengthen the institutional arrangements described below.
To promote a healthy and competitive industry which delivers value for money in line with international best practice, and to promote the participation and growth of emerging SMEs, Government will:
Since delivery is effected by a range of public-sector agencies, there is a need for diverse forms of co-operation to ensure consultation in the development of policy, and to co-ordinate programme implementation and the development of sound client capacity. In support of these objectives Government:
The Department of Public Works is responsible for co-ordinating the development, monitoring and dissemination of Government policy for construction-industry development. Within the framework of the National Public Works Programme, the Department has established a limited capacity to give effect to the programmes outlined in this White Paper, and will do so in close co-operation with the Construction Industry Development Board, the Emerging Contractor Development Programme and other delivery agencies.
It will promote a public-sector procurement and monitoring culture supportive of effective client practice and improved delivery management, as well as public- and private-sector partnerships, and it will promote training and capacity-building.
To augment its capacity, the Department will enter into agency agreements with private-sector organisations (e.g. research organisations, universities, training institutes, consulting firms, and financial institutions).
To overcome institutional constraints to public-sector delivery, the following initiatives will be advanced:
Complementary to State responsibilities, industry should take responsibility in a number of areas. These include commitment to the following:
In fulfilment of its mandate on construction industry development the Department of Public Works will establish a statutory Construction Industry Development Board (CIDB).
The complexity of the industry is well known to all associated with it. The CIDB will exercise leadership and foster the co-operation of industry stakeholders to pursue development objectives, improved industry practices and procedures - which will enhance delivery, performance and value for money, profitability, and the industry's long-term survival in an increasingly global arena.
With these aims, the CIDB will develop a business plan which builds on the programmes identified and focuses on projects which engage the industry effectively in a framework of ongoing participation.
Appointed by the Minister of Public Works, the CIDB will report to an Inter-ministerial Committee comprising the key national ministries engaged in infrastructure delivery. These include the Ministers of Transport, Housing, Water Affairs, and Constitutional Development - with Public Works as the accountable and co-ordinating ministry.
The composition of the CIDB will mirror the make-up of the industry with appointed members who are innovative, forward-looking and influential in their constituencies. The pursuance of long-term growth strategies demands a broad development perspective which looks beyond the narrow interests of individual stakeholder organisations. Membership will therefore be drawn from all the branches of industry: civil engineering and building contractors, materials manufacturers and suppliers, emerging enterprises, labour, research and development practitioners, clients and the professions - without necessarily representing particular organisational interests.
In constituting the CIDB it is important to bear in mind that the clients of the industry are the driving force of many change programmes, and implementation of any such programme begins with them. The construction industry exists to serve its clients and client needs must be met by the industry.
Clients therefore have a substantial role to play in setting standards and demanding improvements, and their role must be reflected in the make-up of the Board.
The role of the CIDB will be to:
In pursuance of this role and supported by a secretariat, the primary objectives of the CIDB will be to:
In addition to the programme objectives of the CIDB described above, the Board will exercise leadership in supporting the White Paper on Science and Technology, furthering the development of a national system of innovation in the construction industry (i.e. a system through which an industry seeks to create, acquire, diffuse and put into practice new knowledge that will help that industry and its stakeholders achieve their individual and collective goals). As a first step in support of this objective, the CIDB will:
The ECDP will provide direct and comprehensive support to small-scale and emerging construction enterprises. An important role of this programme, or agency, will be to influence construction-industry transformation in a manner that purposefully encourages the emergence of small and emerging enterprises.
In the light of the complexity of the construction industry, its envisaged transformation, and the specific nature of support required in the sector, Government will establish a dedicated emerging-contractor development programme within the scope of programmes promoted by the National Enterprise Promotion Agency, Ntsika.
Close links would need to be developed with industry, and it is therefore envisaged that the programme should be established in close collaboration with the CIDB. However, the ECDP will be constituted in a manner which gains the trust of the emerging sector and its clients.
The role of the ECDP will be to:
In pursuance of achieving its role, the ECDP will:
In pursuance of its role, and supported by a secretariat, the primary objectives of the ECDP will be to:
Policy and programmes to develop the performance and capacity of the industry cannot be managed or refined without adequate monitoring and evaluation systems.
Within the ambit of its own activities, the Department of Public Works has commenced the process by establishing project-reporting procedures aimed at capturing data on the achievement of job creation, training and emerging-enterprise development. This, together with the consultants' roster and a preliminary database of emerging contractors, constitutes a starting point for a comprehensive monitoring and evaluation system.
A monitoring and evaluation system which continuously gathers information nationally will serve several purposes, namely:
The long-term aim is to establish and maintain a register of all contractors and construction enterprises. In addition to the monitoring of performance it is in the long-term public interest that only enterprises registered with the CIDB should undertake certain categories of construction work, determined in consultation with industry stakeholders.
Public interest in this regard includes quality, health and safety, environmental factors and potential losses to the Receiver - which ultimately impact on development finance. Such registration will ensure the success of industry-wide development programmes and compliance with performance standards, including those concerned with labour regulation.
Existing voluntary organisations have been unable to monitor or discipline their members, partly because no single organisation can claim to represent the industry. This has contributed to the poor public image of the industry.The establishment of such a register which tracks private as well as public-sector performance can only be effective in conjunction with the establishment of a statutory CIDB that has jurisdiction over the entire industry.
The immediate objective is to establish a register which accredits enterprises for public-sector work, and which captures data on the performance of these enterprises.
Ultimately, it is envisaged that the register will comprise a set of subdirectories for all contractors, subcontractors, consultants, and training and support providers. These subdirectories will be disaggregated in terms of identified capacity and performance criteria in a manner that would enable the public sector to `prequalify" firms for potential work opportunities. Since the public sector already makes use of select tender lists, and rosters, and applies some performance criteria in the awarding of tenders, the proposal to develop more systematic registers for other construction-related enterprises is merely an extension of Government's existing practice.
In terms of the programmes outlined in this document, contractors and consultants will be in receipt of considerable State funding for training, mentoring and development activities. In order to ensure that these funds are appropriately used and that the public sector contributes effectively to an environment in which individuals and firms develop to their full potential, Government requires a mechanism to monitor progress. The register would be used to monitor the development of emerging contractors and reward improved performance through the allocation of scarce resources for training and business support.
Since new contractual requirements may limit previous contractual risk and responsibility by reducing or waiving sureties or performance guarantees, these registers will enable the public sector to allocate contracts with confidence that emerging contractors can perform at the required level. The registers will also enable the State to determine at what stage successful contractors should graduate from support programmes. Furthermore, the registers will allow the State to act in the case of non-performance of emerging and established contractors, by limiting access to future public-sector construction contracts.
The register will be developed and maintained by the CIDB, and monitoring and evaluation of public-sector contracts on behalf of Government will be co-ordinated by the Department of Public Works, in collaboration with the CIDB secretariat.
This co-management of a public-sector capacity and performance register would accomplish several objectives:
Performance criteria will be defined in terms of the proposals outlined elsewhere in this document (see Chapter 4.1.4), and the CIDB will ensure that they are established in close collaboration between industry and the public sector. These would include performance standards on the following:
The above framework of standards will be introduced over a period of time to allow Government, in consultation with the CIDB, to formulate appropriate standards and give construction enterprises sufficient time to put in place the appropriate procedures. During this period, the standards will be applied progressively until a comprehensive set of best-practice standards are in force on public-sector contracts. As there are already construction enterprises close to defining the level of "best practice', it is proposed that an increasing proportion of public-sector work be set aside for those that may qualify during the interim phase. After a period of time to be determined by the CIDB, all public-sector contracts beyond a certain value (to be established) will be awarded only to construction enterprises who are accredited in terms of established standards.
Interim guidelines will include a waiver of some performance criteria for contracts of limited value, in order to encourage emerging small and medium firms. However, even for this grouping, certain minimum standards will apply to avoid serious breaches of policy, possible through subcontracting. The performance criteria will therefore become progressively more rigorous as the value of contracts increases, on the assumption that the larger contracts will be performed by the more competent firms. As performance and capacity are regarded as an indicator of competitiveness, the same performance criteria will be applied to both established and emerging enterprises on contracts beyond a value which is to be established.
The preceding pages have documented the challenges facing industry and Government, together with ideas on promoting the industry's growth and development. A summarised analysis of policy on construction-industry development is presented in Chapter 2, and is preceded by a brief description of the policy formulation process which is described in Chapter 1.
Principles and constraints are elaborated throughout the document. Proposals of a programmatic nature have been put forward in the five chapters dealing with stability, industry performance, human resources, the emerging-sector and public-sector capacity. Finally, proposals have been advanced on the institutional arrangements necessary to co-ordinate, evaluate and adjust the envisaged programmes on a continuous basis.
To reiterate, Chapter 3 aims at attaining a more stable demand and employment environment, as the foundation for improved industry performance. It proposes that the State should aim to moderate the fluctuations in its own expenditure by developing clear medium-term, fixed-investment guidelines, and that the scheduling of public-sector spending would provide a more predictable environment for private-sector investment. It further proposes the promotion of sound industrial relations through appropriate public-sector procurement mechanisms aimed at bringing a greater portion of the workforce within the ambit of labour regulation.
Chapter 4 examines mechanisms to enhance industry performance through the establishment of not only minimum, but also best-practice performance standards. It proposes that their promotion in the industry be achieved through innovative public-sector procurement practices. It envisages that these standards will relate to health and safety, productivity and quality, training, employment practice and environmental protection. The establishment of a register of contractors, accredited to tender on public-sector projects, is proposed as an integral measure which would also support the objectives of several other programmes.
The development of the human resources central to industry's improved performance is dealt with in Chapter 5, which reviews Government's human-resource development strategy in the specific context of the construction sector. In particular, proposals are advanced on governance and financing to enable access to training consistent with the reality that the bulk of the workforce is employed by unaffiliated emerging black contractors. A turnover levy is proposed as a means of promoting an equitable financing arrangement. At tertiary level the chapter highlights the need for training to be aligned more closely with development priorities and for intensified affirmative action to achieve greater representivity.
The focus of Chapter 6 is the creation of new industry capacity. It advocates the promotion of the emerging sector through affirmative action in support of historically disadvantaged sectors of society. The key proposal centres on the need for a specialised and dedicated emerging contractor-support programme to build on the affirmative-procurement policy developed by the DPW, and to promote the sector's ability to access finance and managerial skills.
Chapter 7 deals with the need to develop the public sector's enabling role and its capacity to manage the delivery process. It affirms the DPW's commitment to pursue delivery approaches which target the marginalised, and identifies the need for special skills associated with this approach and with the full spectrum of delivery models and procurement mechanisms. The chapter recommends the commissioning of research to review and propose possible methods to effect a streamlined regulatory environment supportive of public- and private-sector innovation. In this regard, the role of the planned overarching Council for the Built Environment Professions is also highlighted. Capacity constraints are addressed through short- and medium-term training strategies. A policy of secondments from the private sector is advocated as an immediate means to overcome delivery bottlenecks.
Throughout the document, each proposal indicates the nature of institutional response necessary for its implementation. These are brought together comprehensively in Chapter 8, which outlines arrangements for inter-governmental and industry-wide policy co-ordination. This chapter describes the nature and functions of the proposed statutory Construction Industry Development Board which is seen as essential for the co-ordination of any strategy for industry improvement.
The creation of an enabling environment in which growth and development benefits are maximised in the construction industry is a long-term endeavour of co-operation between Government and the industry. Recognition of this reality makes it imperative to begin the process now. The establishment of a statutory development board requires planning, consultation and legislation.
To ensure policy alignment and maximum co-ordination, Government has constituted an Inter-ministerial Committee comprising the key national ministries engaged in infrastructure delivery. These include the ministries of Transport, Housing, Water Affairs, and Constitutional Development, with Public Works as the accountable and co-ordinating ministry. This committee will ensure focused political support and co-ordination of measures aimed at enhanced infrastructure delivery, construction-industry growth and improvement, and development of the required institutional capacity. It will provide ongoing policy direction in the implementation of strategic programmes and will advise cabinet.
Interim measures have been put in place to ensure that enabling programmes are introduced in a partnership which binds the public and private sectors.
On behalf of the Inter-ministerial Committee, the Minister of Public Works has appointed a Task Team on Construction Industry Development, drawn from industry and Government, as well as a broader reference group. The Department of Public Works provides the Task Team with executive and co-ordinating capacity.
The Task Team's main purpose is to drive the institutional development envisaged above, particularly the establishment of a statutory Construction Industry Development Board (CIDB) as a permanent vehicle for public/private-sector co-operation on construction industry development programmes. The Task Team has provided a focal point for consultation on the Green Paper and continues to act as a reference in the further development of policy and strategic programmes. It is envisaged that the Task Team will have achieved its purpose when it hands over responsibility to the statutory CIDB.
Emanating from the Green Paper, the broad terms of reference of the Task Team have been expanded to include the following:
In response to the broad terms of reference outlined above, the Task Team has developed a business plan and a mission statement, which have been endorsed by the reference group of industry stakeholders.
On the basis of this business plan, the Task Team is facilitating and guiding the planning and introduction of programmes and projects that promote industry improvement and lay a foundation for the functioning of the CIDB.
Thus, focus groups of industry experts have been constituted on issues ranging from the scheduling of public-sector spending and capacity building to the register of contractors, and to human-resource development. This consultative planning process set in motion by the appointment of the Task Team, has focused the diverse talents and resources of the industry on a range of development initiatives which transcend narrow interests and are promoting a common industry-development agenda.
Accelerated delivery of infrastructure is critical to the objectives of reconstruction and development. It is in the interests of Government, industry and the public that levels of industry efficiency and effectiveness be raised, together with those of public-sector delivery agencies.
For those that work in the industry, as employers and employees, the growth and performance strategies proposed in this White Paper will bring greater opportunities for involvement at every level.
Greater stability, improved access to training and career-path development linked to entrepreneurial development measures, will ensure that growth coincides with the need to redress historical inequity and create sustainable employment.
Ordinary South Africans, the beneficiaries of construction work, should gain from improved product quality and value for money.
In an increasingly global construction market, the South African economy as a whole will benefit from a more competitive industry able to provide innovation locally and to export construction services abroad.
A comprehensive approach to tackling the interlinked and mutually reinforcing impediments to industry development and the achievement of socio-economic objectives is beyond the scope of any single Government department, or of the industry in isolation. A concerted national approach is necessary.
Co-ordinated innovation will reduce costs to the taxpaying public, as wasteful duplication is avoided. In this White Paper Government has outlined the role it is prepared to play in this joint endeavour. The principle of good governance underpins the envisaged establishment of the CIDB as a vehicle for national co-ordination. On behalf of all stakeholders, this institution will drive the ongoing implementation of an industrial development strategy to promote the industry's enhanced contribution to South Africa's economic well-being.
In refining this industrial development strategy as a firm foundation for the work of the CIDB, the Inter-ministerial Task Team, the DPW and the infrastructure-delivery departments associated with this policy initiative will build on the existing strengths of the industry to advance the many transformative initiatives already in progress.