Sanral set to transform the construction industry and use of black-owned suppliers
The South African National Roads Agency (Sanral) will, in future, use its procurement and supply chain processes to transform the construction industry, break down monopolies, and advance the broad participation of black-owned contractors and suppliers.
"Sanral’s new transformation policy sets clearly defined targets for the participation of black contractors, professionals and suppliers in all projects commissioned by the agency," Minister of Transport Joe Maswanganyi said at a meeting in Johannesburg on Friday, in which he unveiled the agency’s draft transformation policy.
Sanral says it will now only do business with companies that are at least 51% black-owned and with a minimum B-BEE Level 2 rating. A maximum of 15 tenders per year will now be issued to a single company and contractors will be required to make use of Sanral-approved sub-contractors.
The same provisions apply for road maintenance projects to ensure the broad-based participation of local companies and communities. Concessions to manage and operate toll roads will only be awarded to companies with a 51% black ownership.
To reduce monopolies, Sanral also said it would limit the number of contracts awarded to established and dominant industry players.
Sanral CEO, Skhumbuzo Macozoma, said on Friday that the state-owned company was committed to going beyond the minimum requirements for transformation set by existing legislative and regulatory frameworks.
"Sanral plays a critical role in the construction and related industries. We are keenly aware of the impact our procurement practices have on economic transformation, job creation and the lives of millions of people across SA," said Macozoma. "We accept the responsibility to use our procurement and supply chain processes to transform the construction industry, and Sanral is confident that this will be a catalyst for a much broader-based participation of black-owned companies in the sectors."
Meanwhile, black real estate and property developers will be allocated all Sanral-related business on contracts below R100m and the 51% requirement will apply for larger developments.
Various South African construction and engineering associations had not responded to requests about what this might mean for road construction in SA, and for the broader infrastructure industry. However, Isabella Makuta, group corporate affairs director at JSE-listed construction company Group Five, said: "Sanral is clear [about] their intentions — as such, we cannot comment any further on this. Suffice it to say that we have ongoing productive engagements with Sanral as one of our key clients."
With Neels Blom