Increasing investment and greater predictability of demand, together with a more stable employment and contracting environment as outlined in Chapter 3, provide a foundation for further public-sector measures to enhance industry performance.
The past two decades of volatile demand and markets that are contracting have left the construction industry with capacity and performance constraints. Official statistics and other independent research indicate that productivity and output quality have fallen significantly since the early 1970s, while health and safety conditions showed little improvement. In light of Government's social and economic objectives, and the increasing shift towards a globalised construction economy, it is essential that both the performance and capacity of the South African industry should be enhanced.
In the interest of promoting a healthy and competitive industry that delivers value for money in line with international best practice, the public sector has a responsibility to adopt policies that support the goals of improved production practices.
These would include the establishment and promotion of "best-practice standards", based on the work-process innovations exemplified by leading South African and international firms, together with measures to promote their attainment.
Promotion of these best-practice standards will not only support the long-term development of the industry, but can also begin to address many of the present deficiencies and constraints within the industry.
Labour market constraints associated with unregulated labour-only subcontracting have been dealt with in the preceding chapter. Further constraints to improved performance of the broader industry are discussed below:
The CIDB will be established as a statutory national authority recognised by both the public and private sectors, with the competence to co-ordinate the ongoing development and implementation of minimum and best-practice standards.
Led by the Department of Public Works, the public sector will aim to enhance performance improvement in the construction industry by introducing, testing and monitoring procurement measures to promote best-practice standards for health and safety, productivity and quality, training, employment practice and environmental protection. In co-operation with industry the following approaches will be pursued:
Partnering relationships between clients and contractors have proved an effective means to achieve improved quality and reduced costs in the private sector. Within the framework of public-sector procurement, such an approach is less easy to implement but would provide similar opportunities.
A practical difficulty with introducing partnering in the public sector is the requirement that such work be tendered for competitively, and in regard to individual projects.
Although partnering can still be appropriate for individual projects, the real benefits arise from strategic partnering relationships where a relationship is established for a number of projects. Therefore, while the concept of strategic partnering will need to be further elaborated upon in the public-sector procurement context, the public sector will pursue project-specific partnering relationships on selected public-sector projects.
These partnering approaches will include delivery models such as design-and-build and design-build-operate-transfer, which will initially be adopted on leading public contracts.
International experience in the industry indicates that the creation of less adversarial relations in the workplace contributes to the improvement of performance. Furthermore, it is Government's position that the adoption of participative management practices by the construction industry can contribute to resolving problems associated with poor labour relations, skills shortages, declining productivity and output quality, as well as unacceptable health and safety standards.
Construction enterprises should therefore be encouraged to introduce procedures to allow for the participation of employees and subcontractors in the construction process - even if not required by law.
The use of ADR in resolving labour disputes has already been formalised by the Labour Relations Act, and there have been successful local and international examples of the use of ADR in resolving contractual disputes in the private sector.
The public sector will promote the use of ADR within the industry. In addition, recommendations adapted largely from the Latham report1 will be introduced to the construction industry, specifically for public-sector contracts. These include the following:
The public sector will actively encourage the adoption of internationally comparable productivity and quality programmes such as ISO 9000, which also contribute to reduce costs. An incremental approach will be adopted, in which both the design and delivery agencies will be encouraged to acquire certification in terms of ISO 9000 or a comparable accreditation programme for certain prime public-sector contracts.
Following the example of Singapore, where accredited firms get up to a 5% tender advantage, the public sector will consider adopting similar preferential policies here. The public sector will also investigate the advantages of adopting a quality auditing system, such as the CONQUAS system used in Singapore.
Similar productivity and quality certification will also be considered for certain subcontractors and further consideration will be given to nominated subcontractors since they have a significant influence on productivity and quality performance. The CIDB will encourage the dissemination and use of productivity and quality-improvement techniques such as work study, statistical quality control, quality circles, total quality management and business-process re-engineering. In the case of SMEs, public-sector support will promote appropriate productivity and quality programmes (see Chapter 6.5).
Procurement-related measures will be promoted to ensure that the requirements of the Occupational Safety and Health Act are adhered to. In terms of these requirements, all workers will eventually be expected to have undertaken certified health and safety training on all public-sector contracts, although the roll-out of this requirement will be incremental, starting with larger contracts. Additional mechanisms aimed at promoting health and safety will also be defined in terms of best practice.
The public sector will use its procurement leverage to eventually enforce the existing requirements of environmental protection legislation on all public-sector contracts. Initially, minimum and best-practice standards will be adapted or developed (such as ISO 14000), and made a condition of contract on a select number of prime public-sector contracts.
To promote adherence to legislative requirements, The CIDB will monitor industry practice and will make recommendations to the Department of Environmental Affairs & Tourism on the need for increased penalties and other appropriate measures.
The South African construction industry is experiencing human-resource constraints as a consequence of the poor market conditions faced over the past two decades. Proposals which are focused on addressing these constraints and on creating new human-resource capacity for the industry are described in Chapter 5.
The promotion of the above standards will be difficult as long as the division between design and delivery persists. International precedents indicate that many of the difficulties associated with these issues arise at the design stage, long before construction work begins. When problems then arise during the construction phase, they inevitably result in costly delays and/or design variations. Integration will be promoted by the CIDB and the public sector through:
Following the precedent of the Construction, Design and Management (CMDM) regulations promulgated in United Kingdom, where health and safety responsibilities have been extended to clients and designers, it is proposed that similar measures be introduced in South Africa. This would promote a statutory link between clients, designers and site health and safety management.
The establishment of best-practice performance standards, partnering and participative management techniques will be undertaken in close collaboration with industry and the public sector through the Construction Industry Development Board (see Section 8.4). Consultation with clients and professional bodies will enhance this endeavour.Public sector procurement strategies, which are discussed in Section 4.2 below, will be used to give effect to the adoption of both minimum standards and best practice.
Affirmative procurement policy has demonstrated the ability of the public sector to transform industry practice and to impact on the socio-economic environment. Procurement measures, as a lever of change, have yet to be used in the attainment of improved industry performance and the promotion of standards relating to health and safety, productivity and quality, training, employment practice and environmental protection.
The public sector will introduce procurement mechanisms to promote best-practice methods and standards on public-sector contracts with the understanding that this will influence the transformation of the industry into a world leader, providing improved quality, productivity and value for money to its clients, as well as greater health and safety and environmental protection to its workforce and the general public.
Constraints within the public-sector procurement system are outlined below:
Following the examples of Singapore, New South Wales and other Government-led initiatives, two methods of promoting best practice will be promoted:
For certain categories of contract, tenderers would be required to be accredited - in terms of either of the above methods - on health and safety, productivity and quality, training, employment practice and environmental protection.
A register of accredited construction enterprises constitutes an essential tool for industry transformation, for monitoring the performance of enabling environmental programmes, and for ensuring compliance with performance standards on public-sector projects. All construction-related enterprises engaged in public-sector work, or in receipt of State funding for training or support functions, will therefore be required to be registered in a manner that will reflect their capacity and performance.
The registration and categorisation of contractors and enterprises will enable the following:
The associated monitoring and accreditation system will, in time, obviate the need for tenderers to have to provide the same documentation for each new contract, since this information would become incorporated in the performance and capacity criteria which constitute the registers. It may then only be necessary for tenderers to indicate whether their circumstances have changed since they last participated in public-sector work.
Promotion of participative management and partnering will require new monitoring approaches at a project level by both professionals and public-sector agencies. In response, the public sector will convene post-job reviews on best-practice prime contracts, covering health and safety, productivity and quality, training, employment practice and environmental protection and performance criteria, in order to recommend modifications on future public-sector contracts.
While these post-contract meetings should largely be viewed as a learning process for immediate participants, the reported results of the post-contract meetings could be used by the CIDB and public-sector agencies as a means of refining performance standards.
The need for close collaboration between all sectors of the industry is nowhere more apparent than in this enabling programme, and the CIDB will review and recommend appropriate accreditation criteria. The CIDB will also assist in determining to which project categories these accreditation criteria should apply.
The CIDB, together with the national infrastructure departments, will need to provide active leadership in co-ordinating the understanding and the use of the above strategies in all spheres of Government.
The South African construction industry is experiencing human-resource constraints as a consequence of the poor market conditions faced over the past two decades. The proposals contained in this chapter are focused on addressing these constraints and on creating new human-resource capacity for the industry. By stabilising the construction environment and re-orienting existing training and training institutions in terms of Government's skills-development strategy, these proposals will help create new careers for those working in the industry.
Declining investment and demand volatility has left the industry's skills base depleted, as experienced people leave the industry and poor career prospects discourage new entrants. Firms, faced with declining markets and tighter margins, have cut back on the education and training of staff.
Institutional mechanisms for supplying training to the industry have also come under strain as the structure of the industry changes with the shift towards LOSC and the emergence of new firms outside the formal sector frameworks. Declining enrolment and falling contributions have left the existing training institutions facing increasing deficits while the majority of the industry's workforce is still unable to access such training. This situation cannot be allowed to continue, because unless a viable method of governing and funding training is established, the proposed human resource development strategy and many of the enabling environment programmes will fail.
Development of adequate human resources is essential if the industry is to meet the demands of reconstruction, growth and development. The management, financing and content of industry training and education must be re-orientated to ensure that all participants have access and contribute equitably to the human-resource development of the construction industry.
The constraints to achieving this vision are discussed below.
The predominance of small firms and the prevalence of LOSCs with few resources and minimal relations with the formal sector complicate the establishment of equitable and sustainable funding mechanisms. The current payroll levy, if it were to apply to labour-only subcontractors and SMEs, would place the burden of training on small enterprises with the least resources.
Though progress is being made by the industry training boards, the linkage between financing, governance and, to some extent, even training provision has contributed to a delay in the genuine restructuring of training. Efforts at restructuring have been further complicated by the legal and institutional divisions between industrial sectors and industry associations.
Re-orientation of training content and organisation is likely to prove a lengthy process which must meet the requirements of the National Qualifications Framework and the Department of Labour's proposals on the establishment of a construction Sector Education and Training Authority (SETA) registered under the National Skills Authority.
Although affirmative-action policies are looked to as a means of overcoming human-resource deficiencies, there is little evidence that such policies have received substantial support. Statistics indicate that some 1 650 professionals, semi-professionals and technicians, categorised as previously marginalised, are engaged in the construction industry.
Projections indicate that growth within the construction industry over the next five years will require a great increase in the numbers of professionals, semi-professionals and technicians. To achieve greater representivity of previously marginalised persons, a proportionately larger increase of this grouping is required.
The training of built-environment professionals in South Africa remains a cause for concern with regard to the success or otherwise of affirmative-action measures. A review of the six universities offering built-environment professional degrees, indicates that in the past five years only three institutions have reflected significant numbers of historically disadvantaged graduates or currently enrolled students.
The restructuring of training must achieve the following:
In terms of the Department of Labour's skills development strategy, the responsibility to establish a Sector Education and Training Authority (SETA) rests with the industry, and the Department of Public Works - through institutions it has established for these purposes (including the CIDB) - will seek to provide leadership for any industry initiatives to establish such a structure. In extending this support, Government proposes a SETA for the construction sector as a whole, encompassing both the existing building and civil engineering institutions.
Although in principle unification need not be a pre-condition for restructuring of the current training provision, in practice the conflicting interests of the various sectors in the industry are unlikely to enable it to deliver the required new approach unless the current training structure is radically changed. While the constitution of a construction industry SETA could include two or more training authorities as substructures, Government does not consider this a desirable long-term goal.
Given the current division between the building and the civil engineering sectors' education and training systems, it is Government's view that the existing framework of accreditation should be revised. Addressing these issues would support the activities of the structures created by the industry. However, within the framework of the skills development strategy there is a need to:
Given that a large part of trade operations in the construction industry can be carried out with a relatively low level of specialisation, and only fundamental and core skills, Government will support training programmes designed around a limited range of "specialisations". Attendant "fundamental" and "core" elements would allow entry onto a career path for historically marginalised groups. It is thus proposed that the qualifications that are agreed upon must be linked to a qualifications framework which allows individuals to develop a sustainable career in the industry.
Government proposes that learnerships should be designed specially for community- and labour-based construction projects envisaged under the Civil Engineering Framework Agreement. Such learner-ships, which integrate core, fundamental and specialisation skills, would help to overcome the limited training currently being experienced on projects within the Community-Based Public Works Programme (CBPWP) and elsewhere, and would provide entrants with a real base for progression within the industry.
It is Government's view that a flexible and integrated framework of career paths is required to achieve the skills-development objectives of the construction sector. Such a framework would increase the linkages between work and education and training opportunities, particularly for historically disadvantaged industry participants.The development of more flexible and integrated career paths needs also to take account of recognition of previous learning (RPL).
This RPL will be an important means of thorough assessment, giving credit to prior learning which has been acquired in different ways (e.g. through life experience).
In designing career paths for the construction industry, Government proposes that the following four principles of the NQF be applied:
Given the characteristics of the construction sector, particularly the vast differences between large and small firms and a strong reliance on subcontracting, an industry-specific model for the funding of training needs to be considered. In formulating an appropriate levy system the following issues should be taken into consideration:
The current skills-development strategy of Government makes provision for levy systems that are different from the proposed payroll levy. The industry needs to consider a levy system that would be easy and cheap to administer and obtain an equitable contribution from firms, regardless of size. Examples include a "turnover levy" or a levy on primary construction materials.
Although the skills-development strategy favours granting levy exemptions to certain categories of SME firms, it is proposed that this would be inappropriate to the construction sector, given its significant reliance on subcontracting. Since the majority of subcontractors are already very small, any exemptions from the training levy would simply undermine the whole scheme and could encourage main contractors to even further fragment the industry to effect cost-savings through subcontracting.
As far as the State is concerned, it is proposed that all public authorities involved in construction work allocate limited resources for training to the most marginalised sectors, the unemployed and youth. These resources could either be allocated through the National Training Fund (NTF) or directly through public-sector project-specific funding. It is possible that a percentage of public-sector project funding could be deposited into the NTF to provide for follow-up training programmes aimed at furthering the skills of those who exit project-related training successfully. Such trainees could receive a voucher for presentation to an accredited training provider.
In concert with current initiatives by the Department of Education, it is Government's view that it is necessary to ensure that the education of industry professionals accomplishes the following objectives:
Government will interact with the institutions offering such professional training to ensure that these objectives are achieved. It is important to recognise that the above proposals be located within the paradigm that recognises the importance of:
Proposals on governance have been advanced under Section 5.5.1 above. Along with the principle of separating governance, funding and provision, and noting the role of the Construction Industry Development Boards (CIDBs) in countries like Singapore and Malaysia, the Government proposes that consideration should be given to combining the role of the envisaged SETA with the CIDB in the active promotion of appropriate industry-skills formation.
It is also proposed that the performance standards proposed in Chapter 4 include criteria covering the above human-resource development objectives. These standards, which would initially be applied as best-practice standards on select public-sector contracts, would ultimately form the basis of the minimum standards applying to public-sector work as proposals for the new training system become consolidated.
There is a need for the co-ordinated interaction of Government, the statutory professional bodies and the contracting sector to ensure:
In this regard proposals are advanced in Chapter 7 on the establishment of an overarching Council of the Built-Environment Professions (CBEP) which will establish appropriate links with the CIDB. The CIDB and CBEP will monitor the skills requirements of the industry and advise the public sector on the revision of their procurement performance standards to address any perceived human-resource development shortfalls.
Years of declining demand and uncertainty have halved the capacity of the traditional construction industry, while at the same time they have seen the introduction of a large number of new, much smaller firms. Many of these firms are either labour-only subcontractors (LOSCs) or small and micro-enterprises (SMEs).
Given the numerous historical and economic constraints that have hindered the full participation of SMEs in the economy, Government is committed to bringing small business into the mainstream of economic activity. It seeks to enable the increased participation of black-owned and -controlled enterprises in the production of value-added goods, in wealth-generating enterprises and export markets.
Government believes that emerging construction-related SMEs can contribute significantly to the realisation of key economic and redistributive objectives for a number of reasons:
In creating the required new industry capacity, Government's construction-industry policy will promote the participation and growth of SMEs through affirmative action in support of historically disadvantaged sectors of South African society.
Recent Census figures show that civil engineering is the most concentrated sector, and home-building the least concentrated.
Between 20% and 30% of the number of firms in each sector (civil engineering, general contractors and home builders) accounted for more than 80% of output in 1991. On the basis of research conducted in 1992, 1994 and 1996, it is reasonable to assume that this pattern of concentration still holds.
Construction-related SMEs face various difficulties in gaining access to the market. Inexperience, lack of managerial and marketing ability, and lack of access to capital, contribute to a vicious circle which pegs their growth and development.
A range of public-sector initiatives are beginning to open up opportunities. Foremost of these is procurement reform, and the adoption by the DPW of the "10-point plan" which is aimed at the immediate transformation of the situation facing black contractors.
One of the most significant constraints facing SMEs is their lack of managerial expertise. This gives rise to related problems such as poor cash-flow management, inadequate labour supervision and insufficient turnover.
The most common response has been to establish support programmes for SMEs. However, research on programmes designed to support the SMEs in the low-income housing sector indicates that many of these did not equip the builders with the skills of "risk management" that would enable them to survive in a competitive market. While these programmes provided managerial support, they restricted enterprise operations to a level that did not guarantee self-sufficiency.
A primary constraint facing SMEs is access to training to improve their business skills and develop trade skills within their labour force. Small contractors are often unregistered and unaffiliated to the main employer bodies. They pay no levies and have limited or no access to the training programmes offered by the current industry training boards. They are therefore not in a position to improve their productivity.
Without access to available training institutions, many subcontracting firms train their own operatives "on the job". However, the erratic availability of construction work diminishes the value of informal, on-the-job training. In contrast to the continuity and depth provided by the old apprenticeship system, it is unlikely that new generations of semi-skilled labour will be sufficiently experienced to pass on adequate skills to their operatives in the future. The industry can therefore expect to see a progressively deteriorating standard of skilled work on site.
A second problem concerns the appropriateness of current training options. The training provided in the construction sector through the Building Industries Training Scheme (BITS) and the Civil Engineering Industry Training Scheme (CEITS) has mainly focused on providing technical and supervisory skills. A limited range of managerial training has been undertaken by construction companies or private-sector consultants.
Beyond the provision of training and the development of new contracting arrangements, there is the need to take cognisance of business failures. International research indicates that 30% to 50% of small firms fail in their first three years, and only 40% to 45% of firms remain in business after ten years. Since these examples are derived from a relatively sophisticated sample it is likely that small-business development in South Africa will experience a much greater failure rate.
Thus, the current expectations for growth are likely to be vastly exaggerated because they assume a linear or exponential growth pattern which does not take account of business failure. There is also no reason to assume that those SMEs that survive will necessarily grow. To quote from the British experience, the probability that small firms will grow to employ more than 100 employees is between 0,5% and 0,75%.
A difficulty experienced by SMEs is the understandable demand by communities for local employment in their areas. A "use of local labour" specification in fact features in many current contract documents. Contractors operating at this level are unable to establish and consolidate a permanent skilled workforce.
This phenomenon affects black contractors more severely than it does their established counterparts because the emerging contractor is viewed as a threat and as competition by local communities. Even on a single project incorporating several identified communities, there is a tendency for each community to reserve work within its domain.
This has severe consequences for enterprise growth as valuable workers are lost due to the lack of continuity. Training investment is diluted to the point of being wasted and forward planning becomes difficult.
Despite the existence of several national associations of emerging contractors, the bulk of emerging black contractors remains unaffiliated and unregistered. The sector lacks cohesion and barriers to organisation include variations in capacity, sophistication and vision. Existing national associations have very limited human and financial resources with which to organise the sector into the mainstream. In relation to the established sector, they remain weak.
Overcoming industry capacity constraints and historical inequalities requires the promotion of SMEs. Given the high-risk nature of contracting to both client and enterprise, Government commitment to SME promotion must be underpinned by a dedicated and effective programme of public-sector support.
Public-sector support will be built on the following additional principles:
In support of the emerging contracting sector, the public sector will establish a comprehensive support programme for SMEs in the construction sector.
Affirmative procurement policy, introduced and tested by the Department of Public Works, will be systematically rolled out within the public sector. The pilot support programme developed in co-operation with the Department of Trade & Industry, the black construction industry, the Ntsika Enterprise Promotion Agency (NEPA), Khula Enterprise Finance Ltd and the International Labour Organisation (ILO), will implement the measures detailed below, which will build on existing initiatives and at the same time expand the range of support mechanisms and practices that can encourage the growth of this sector of the industry.
With the support of the CIDB and other infrastructure-delivery departments, the DPW will promote continuous review of conditions of contract, tender specifications and design criteria to ensure that these do not constitute barriers to greater participation of small and emerging businesses in the mainstream construction economy.
The above review process should ultimately result in the development of a simplified and standardised set of contract documents. The simplification and standardisation of tender and contract documentation coupled with the wider dissemination of information and transparent adjudication processes for certain categories of public-sector contracts will constitute a major stepping stone in the ability of small enterprises to access work opportunities.
In line with proposals made in Chapter 4.2 of this document (Procurement Strategies to Effect Best Practice), pre-qualification of contractors for certain categories of public-sector contracts will be subject to accreditation of performance standards, which includes the promotion of SMEs (such as participation quotients). The approach adopted may allow a waiver of some performance criteria for contracts of limited value for emerging SMEs. However, even for such SMEs, certain minimum standards will apply as outlined in Chapter 4, in order to limit avoidance and promote competitiveness.
Through the Emerging-Contractor Development Programme (ECDP), the Department of Public Works is committed to ensuring a steadier flow of work suitable for various categories of small and emerging businesses. Pilot approaches have demonstrated that it is possible to extract information on the amount and types of work suitable for various categories of small and emerging businesses, and to direct these opportunities through applicable procurement mechanisms. This task is facilitated by a database linked to a register of such enterprises.
Within the ambit of the DPW's ECDP, an organised system has been introduced to disseminate information on tenders, tendering procedure, training, finance and credit opportunities.
In co-operation with all roleplayers, the DPW will systematically expand the system and promote improved access to information.
Currently the National Urban Reconstruction and Housing Agency (NURCHA) provides working capital guarantees on projects run by SMEs, NGOs, community trusts, and non-profit and private-sector developers. NURCHA will serve as a precedent for using public-sector guarantees to enable the previously marginalised to become active in the construction sector.
A prerequisite for improved access to finance is the regularisation of this market to reduce the uncertainty which informs the investment decisions of financial institutions. To encourage the banks to establish specific loan-assistance programmes for emerging businesses, the following programmes are being tested within the framework of the ECDP:
In addition, mechanisms are being explored to enable SMEs to cede contract payments to financial institutions until their loans are repaid.
Consideration will be given to establishing, in conjunction with commercial banks and NEPA, programmes to educate emerging enterprises on loan policies, procedures and requirements.
Sureties or performance guarantees for certain low-risk public-sector contracts are also already being waived or reduced through implementation of the 10-point plan.
However, these facilities will only be accorded to enterprises with a demonstrable capacity to perform. Registration and accreditation procedures, as well as performance monitoring, will minimise and limit risk in such cases.
Since emerging contractors are particularly vulnerable to cash flow problems, this sector will benefit from measures to streamline payment procedures that are being promoted by the Inter-ministerial Task Team on Construction Industry Development. These measures fall within the framework of the enabling programme - Developing the Capacity and Role of the Public Sector.
Conventional mechanisms and procedures for dispute resolution, such as arbitration or litigation, are both costly and time-consuming. Small and emerging contractors with limited financial reserves are wholly disadvantaged - indeed, imperilled - in the event of dispute. Mediation methods sensitive to the circumstances of small and emerging enterprises need to be introduced.
Such mechanisms should strike a fair balance between the aim to produce quality goods and services and the equitable treatment of contractors. The ADR mechanisms proposed in Chapter 4.1.5.3 should accommodate these requirements.
Mediation and other ADR methods suitable to the circumstances of small and emerging enterprises will be introduced in public-sector contracts (see Chapter 4.2.5). The measures outlined will ensure that LOSCs and other subcontractors benefit from the ADR provisions of the main contract.
Access by emerging contractors to construction skills is tied to re-orientation of the structure and funding of industry training discussed elsewhere in this document.
In co-operation with industry stakeholders, the DPW will promote the principle of equitable and manageable payment towards training costs and the ability of contractors to access both artisan and entrepreneurial skills training through the auspices of the new Sectoral Education and Training Authority.
Basic business and contracting management is a sustainability factor. Generally, most small and emerging construction businesses are run by persons who have vocational training experience but are unlikely to have received any formal management training.
Training directed at enterprise owners and managers should cover the following:
The DPW has engaged the support of the ILO to develop a national training programme for emerging contractors - drawing on both national and international experience - in co-operation with all stakeholders.
Programme development includes the training of trainers from a range of training institutions throughout the country and the development of a self-sustaining umbrella organisation to ensure programme growth and continuity.
To ensure significant growth and consolidation of emerging contractors, the DPW is pioneering the introduction of a mentoring programme in support of its strategic projects initiative. Geared to the promotion of prime black contractors, the strategic projects initiative is an extension of the affirmative procurement policy.
In line with the approach adopted for promoting best practice outlined in Chapter 4, monitoring and evaluation systems - including accreditation of emerging businesses - are also to be established to support the effective promotion of SMEs. Since such monitoring and evaluation systems will remove much of the uncertainty associated with newly established enterprises, these systems are likely to expedite the adoption of many of the proposals described above, and will enable the appropriate adjustment of programmes in the light of experience gained.
The programme approaches outlined above constitute the critical components of a specialised support programme to render comprehensive support to small-scale enterprises. This programme will build on work undertaken by the Department of Public Works and other public- and private-sector agencies as well as by NGOs. Support activities will focus on:
The State has limited resources with which to support SMEs. Therefore, interventions to promote SMEs will be designed to encourage and reinforce private-sector initiatives and to avoid reliance on the public-sector, which cannot substitute or replace the existing finance, training, buying and marketing infrastructure.
Support eligibility criteria will therefore be clearly defined as well as criteria for the discontinuation of support.
A central thrust of the programme will be to impact on the framework that governs the construction industry and on the client fraternity in a manner which purposefully promotes an environment conducive to emerging-sector growth and transformation. With this objective, the DPW, in co-operation with the established and emerging industry, and with all stakeholders, will promote the organisational capacity of the black construction sector as a key element of the programme delivery process.
Although the Department of Public Works has a national mandate to develop policies and programmes to create employment opportunities in construction projects and for construction enterprises, very little will be achieved without securing the broad support of the industry. It is equally important in this regard that various Government departments and tiers of Government act in unison. Therefore, the Department has entered into close collaboration with the Department of Trade & Industry to pilot the introduction of the national Emerging Contractor Development Programme, which is elaborated upon in Chapter 8.
1. Sir Michael Latham (1994). Constructing the Team. Final Report of the Government / Industry Review of Procurement and Contractual Arrangements in the UK Construction Industry, HMSO.