Tuesday, January 18

Wild Coast Toll: Ramaphosa calls on communities not to disrupt government infrastructure projects

President Cyril Ramaphosa has again called on communities not to interrupt large infrastructure projects, which is a reference to the activities of business forums or the so-called “construction mafia”.

He spoke during a supervisory visit to the South African National Highway Agency (Sanral) N2 Wild Coast toll project at Lusikisiki in the Eastern Cape.


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“I call on all of our communities, particularly on the Wild Coast, to support not only this project but other projects. We have big dreams and big projects for the Eastern Cape, which is one of the poorest provinces in our country, ”he said.

Ramaphosa noted that the project, which includes the construction of the two mega bridges, will create around 8,000 direct full-time jobs and between 21,000 and 28,000 indirect jobs.

Watch: Video from Sanral showing the latest construction on the Msikaba Bridge as part of the N2 Wild Coast Turnpike project

He noted that these jobs did not exist in the area and translate into a wage bill of around R750 million, adding that the government has often said that it wants to transform South Africa into a construction site.

“This project is a sign of the determination of our government to continue with the construction of our infrastructure,” he said.

Read: Activists urge Ramaphosa to relocate N2 Wild Coast toll road

Ramaphosa said the government indicated when it announced the Economic Recovery and Reconstruction Plan (ERAP) in October 2020 that it will prioritize spending on infrastructure to support economic growth and job creation in both the immediate short term and the long term.

He said that several of the massive infrastructure projects outlined in the ERAP have started.

“Several people keep saying that we are not looking at this infrastructure, but we are looking at exactly what the infrastructure is building,” the president emphasized, citing progress on the N2 Wild Coast project.

This is a response to claims by various organizations and construction industry analysts that no infrastructure project awards are being awarded.

For example, Construction Alliance South Africa (CASA) president John Matthews this month lamented the lack of a consistent flow of work as a key factor affecting construction contractors.

“There are Strategic Infrastructure Projects (SIP) published that we still do not know when they will be tendered or awarded. This makes planning impossible, ”he said.

However, Ramaphosa said the government’s infrastructure plan has helped business and investor confidence “grow by leaps and bounds.”

This despite the fact that surveys on confidence levels in the civil construction and building sector carried out by the FNB-Bureau for Economic Research (BER) this month reveal the opposite.


SA’s construction industry is in dire straits

Confidence in civil construction improves marginally

The FNB-BER civil confidence index marginally improved in Q3 2021, but more than 80% of respondents are still dissatisfied with prevailing business conditions, while confidence among major contractors fell to record levels.

Ramaphosa said the N2 Wild Coast project is Sanral’s flagship infrastructure project and one of 18 national SIPs designated as catalysts.

“By this we mean that they not only stimulate economic activity, but also have a community development component and a service delivery component,” he said.

Ramaphosa said that once the highway is completed, another 900 direct full-time jobs and around 19,000 indirect jobs will be created.

He said these job creation figures affirm Sanral’s sustained commitment to sustainable job creation.

“In the last year alone, Sanral has created almost 18,000 job opportunities in its various projects throughout the country. This is part of a government-wide effort to create jobs in our economy, ”he said.

Read: SA’s Infrastructure Momentum ‘Is Gaining Momentum’

Ramaphosa said that around R4 billion will be spent on targeted business development during the construction period of the N2 Wild Coast project, which will ensure that the investment in this project is returned to the community.

He said that around 120 million rand has already been earmarked for local small, medium and micro enterprises (SMEs) in this area as part of the improvement and connection of roads and several more projects are in the pipeline.

“By regulating that a minimum of 30% of spending is allocated to specific business development through subcontractors and suppliers in the area, approximately R4 billion in the future will flow to SMEs in the OR Tambo and Alfred Nzo districts,” he said. .

The Msikaba and Mtentu bridges are two mega bridges that are part of the N2 Wild Coast Road project, which will connect four provinces: Western Cape, Eastern Cape, Kwa-Zulu / -Natal and Mpumalanga.

Moneyweb reported this month that a new tender is being awarded for the construction of the Mtentu bridge and that litigation remains a possibility to resolve a dispute between the original contractor, Aveng-Stabag Joint Venture (ASJV) and Sanral.


New contract for the Mtentu bridge being awarded by Sanral

The Supreme Court rules in favor of Sanral after the contractors allege force majeure

Construction of this project by ASJV was halted in 2019 when JSE-listed construction and engineering group Aveng claimed that the joint venture had legally terminated the R1.5 billion contract following a force majeure event. Following civil unrest, commotion, protests, and threats from the damage had resulted in the ASJV being denied access to the site and the ability to safely continue project implementation.

However, Sanral CEO Skhumbuzo Macozoma claimed that the ASJV abandoned the contract.

Ramaphosa admitted that the N2 Wild Coast project has not been without its challenges, adding that construction had to be halted at the Mtentu Bridge site “due to community concerns that they were not being adequately included in the development.”

But Ramaphosa said it’s nice that the community engagement goal for the directed workforce set by Sanral in Msikaba was exceeded at the end of July 2021, reaching 37% versus 32% for work completed.

Ramaphosa said that 62% of the total workforce at the Msikaba site are local, and of the 329 employees, 156 are employed by the main contractor Concor and 173 by subcontractors.

“I want to congratulate the National Transportation Department, Sanral, and the contractors for ensuring that issues related to community involvement were handled in a very sensitive manner to ensure that this project runs smoothly.

“I am hopeful that Sanral will continue this proactive commitment to communities in all the projects it embarks on,” he said.

Ramaphosa said that communities have a legitimate expectation of benefiting from large-scale economic projects in their areas.

But Ramaphosa, at the same time, asked the communities to make sure they “work with us and not against us because if you work with us and not against us, you are working for the community.”

“There are times when community members use various other means and sometimes those other means turn into violence and protests turn violent.

“You don’t have to be violent if you want to share the benefits of the projects. We want participation to be community-led, community-based and our people should feel that they are benefiting themselves, ”he said.

Ramaphosa emphasized that project stoppages cost not only contractors but the entire country and also scared away investors.

It also makes the cost of borrowing higher because investors are not prepared to

Invest in South Africa, he said.

“It is important that we work together in this regard. The very purpose for which these structures are being built is to allow our people to benefit from them. It is to allow goods and services to come to you in our communities.

“We will lose many projects and they will be delayed forever if we continue to work in this way.


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