The building industry has welcomed plans by the government to act against extortion rackets, blamed for derailing multibillion-rand infrastructure and construction projects.

In his state of the nation address (Sona) on Thursday, President Cyril Ramaphosa announced he is “prioritising the problem of criminal groups that extort money from construction and other businesses” by bringing together specialised units drawn from the police and the National Prosecuting Authority (NPA) to tackle these “crimes of economic disruption”. 

SA Forum of Civil Engineering Contractors CEO Webster Mfebe said as of November 2019 about R42bn in construction projects had been held up by protesters demanding a stake in the work.

By tackling the issue in his address, the president has “elevated the matter and given it the seriousness and the attention it deserves”, Mfebe told Business Day.

“This is economic sabotage, it is organised crime,” he said, at a time when the country’s economy “is in the doldrums”. 

In October Mfebe held discussions with the NPA in a bid to get site invasions of this nature dealt with under the Prevention of Organised Crime Act.

“I applaud the president because these issues affect the economic outcomes of our country,” Mfebe said.

The spate of disruptions involving so-called “business forums” began in KwaZulu-Natal but has spread across the country in recent years, cropping up in the construction of everything from roads to mines to luxury housing developments.

Examples that hit the headlines in 2019 include the SA National Roads Agency’s  R1.6bn Mtentu bridge project in the Eastern Cape and a R1.6bn oil storage project being built by Wilson Bayly Holmes Ovcon in Saldanha Bay.

The industry has been at pains to distinguish between legitimate attempts by local communities to participate in projects in their area and site invasions by groups demanding a 30% cut in construction projects or face work stoppages and protests.

The invasions have been characterised by a misinterpretation of the Preferential Procurement Policy Framework Act and accompanying regulations, designed to give black South Africans, women and disabled people access to government projects — with groups justifying protests under the banner of transformation.

Mfebe stressed, however, that there “are those genuine cases of communities wanting to be part of the mainstream of the economy through projects that are happening in their localities”.  

“We must distinguish those from pure criminality and armed gangs who do not have any regard for the rule of law,” Mfebe said.

As the construction industry emerges from its December recess period, there are indications that disruptions could start up again, said Mohau Mphomela, executive director of the Master Builders SA association.

With municipal elections set to take place in 2021, there is growing concern the matter will become further politicised “under the banner of transformation”, said Mphomela.

His members look forward to the work by the specialised units, he said, as the problem was still “very much alive”.

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