Development through partnership Construction Industry Development Board Infrastructure for South...

development through partnership

Construction Industry Development Board

Infrastructure for Infrastructure for South Africa’sSouth Africa’seconomic and social growth economic and social growth

cidb

Portfolio Committee(Public Works )

13 March 2006

Gerard Naidoo


Our aim

An enabling regulatory and development framework that builds

A total industry delivery capability to achieve South Africa’s economic and social growth

Empowerment of those historically marginalised

Improved industry standards of performance (quality, employment, skills, safety, health)

sustainable industry sustainable industry developmentdevelopment


SA Backlogs - progressEstimates in 1994 Progress by 2004

Housing – 1.4 to 3 million units Houses built for the poor – 1.6 million

Electricity – 60% had no access 70% of households have been electrified

Clean water – 16 million with no access

Clean water – 9 million people got access

Adequate sewerage – 22 mil without access

63% of households now have sanitation

70% secondary school enrolment 85% enrolment by 2002

2004 State of the Nation Address by President Thabo Mbeki

Construction

2005 State of the Nation Address by President Thabo Mbeki +

Dep. Pres. = ASGISA +

Minister Trevor Manuels budget speech


SOUTH AFRICAN CONSTRUCTION ECONOMY

THE MARKET GROWTH TRENDTHE MARKET GROWTH TREND

SOUTH AFRICA GFCF as a % of GDP

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

30.0%

1947

1950

1953

1956

1959

1962

1965

1968

1971

1974

1977

1980

1983

1986

1989

1992

1995

1998

2001

2004

2007

2010

2013

GFCF % GDP

The need to more than double our output in the next 10 years !The need to more than double our output in the next 10 years !


CHALLENGES AND OPPORTUNITY !

Industry Growth and capacity to deliver Empowerment and enterprise sustainability Challenges for contractor development SMME Development Procurement and delivery Construction Charter and Scorecard implementation Role of the cidb and strategic partners


There is an urgent need to develop quality contracting capacity and skills and to elevate enterprise development in the context of broad based empowerment and meeting the

challenges of ASGISA’s implementation.

The construction economy in South Africa is set for a decade and more of sustained growth driven by growing investment in Gross Fixed Capital Formation (GFCF), low

inflation and low interest rates.


Empowerment

Delivery

Performance

Growth

Capability

Consistent procurement & delivery environment

Quality, safety, health and environment, employment

Skills & systems efficiency

Sustainable enterprises and emergence into mainstream economy

convergencein

focus

Double output – 10

years

Our Strategic Challenge

developmentenvironment

Enablingregulatory &

to drive improved value to drive improved value to clients and society! to clients and society!


Other development programmes

+ EPWP

Manufacturing

Alternative Technologies and Service Delivery

Models

Skills

CIDB Enterprise

And Contractor Development

Framework

Converging focus towards Contractor Development


MaterialSuppliers


SOME KEY SUCCESS FACTORS TO ACHIEVE ENTERPRISE DEVELOPMENT

• Finances• Continuity of profitable work• Effective practices (roles and procurement) of:

- Clients - Built Environment Professionals

• Skilled Contractors and Labour• Materials (Economics)



Key Challenges

Inability of small contractors to engage skills and inability by industry to project the skills demand

Inability to monitor empowerment Lack of a comprehensive approach to

contractor development Inability to target procurement and

development strategies at different contractor categories.


Key Challenges (continued)

Continuous inflow of new entrants undermining sustainability of contractors

A misconception that construction and enterprise development equate to job creation

Closing the first and second economy gap Inconsistent procurement and delivery

practices by clients and that impede sustainable contractor development

The failure of current procurement practices


Empowerment

Delivery

Performance

Growth

Our Strategic Challenge

Capability

““A key development constraint lies in the A key development constraint lies in the dispersed nature of the industry and its dispersed nature of the industry and its

clients –clients –

cidb has developed a range of instruments & cidb has developed a range of instruments & programmes that will drive programmes that will drive convergence in convergence in

development focusdevelopment focus””

The ability of the construction industry to The ability of the construction industry to deliver will affect job creation in all sectors deliver will affect job creation in all sectors and feed directly into the goals of ASGISAand feed directly into the goals of ASGISA

development through partnershipConstruction Industry Development Board


• A growing contracting capacity to deliver on SA infrastructure• Improved performance of contractors• Sustainable empowerment and development

Objectives

Contractor development as key to the cidb MandateContractor development as key to the cidb Mandate

South Africa’s construction output will need to double in less than 10 years !!!

EN

AB

LE

RS

Affirmative Procurement

Charter Process

CIDB Registers (CRS)Streamline Client Procurement

Delivery Mgt

Finance

Skills dev

National Construction Week

Client Development Programmes


Participating Registered gContractors

CIDB

CETA

Other Stakeholde

rs

Financial Institutions

DTI

DPW (+ EPWP)& other Public Sector

Clients

Materials Suppliers

Development

Agencies/Service

Providers

Established Industry &

Private Sector

Possible stakeholder linkages for sustainable impact



Proposed Construction Sector InterventionsProposed Construction Sector Interventions (Short-Medium Term)(Short-Medium Term)

Expand NDPW incubator programme in collaboration with provincial public works, ensuring that all contractors are registered

Promote next round of EPWP learnerships (grades 1 and 2) and ensure that all contractors are registered

Establish key lessons from existing development programs (eg. ECDP-CIP, Vukuzakhe, etc.)

Identify suitable willing and able clients and enter into partnership agreements for implementation



JOB CREATIONLabour based best practice guidelines (resource to stakeholders in job creation goals of Expanded Public Works Programme)

- Manual for road construction (to all contractors)- Contractor Development (by targeting through registers)- Procurement reform and sustainable:

Standard for uniformity in construction procurement

Effective and efficient delivery & procurementToolkit – infrastructure delivery management system for the public sector (supporting tool)

- a basis for IDIP (capacity building)


ASGISA

ACCELERATED GROWTH

GEARING FOR DELIVERY

JOB CREATION

EMPLOYMENT

SKILLS

Accelerated and Shared Growth StrategyAccelerated and Shared Growth Strategy


CIDB ROLE IN ASGISA IMPLEMENTATION

Accelerated and Shared Growth StrategyAccelerated and Shared Growth Strategy

Public Sector client capacity (Under-expenditure)CIDB Role:

• Toolkit “Delivery Management System” and IDIP• “Centres of Excellence” and Outreach• Capacity building to promote best practice (Roll-out Progressing)

Industry skills shortageCIDB Role:

Study of skills shortage in the industry Development of a industry skills development plan (JIPSA + ESDA) Promote framework for contractor development

Maximise the potential of the EPWP and other initiatives to create jobs

CIDB Role:• Promote the labour based technologies• Infrastructure Delivery Management System• Promote best practice in labour intensive method


PROPOSED ASGISA INTERVENTIONS

1) Public sector procurement reform & delivery Management2) Maintenance of existing and proposed Infrastructure (National Business Plan/ Framework + Labour intensive)3) Skills development = Skills Audit based on large projects =

Projections on capacity and requirements + Dept. of Education tertiary institutes + Construction Week + CETA/ DTI / DPE + artisan training= DPW (JIPSA +

Employment Skills Development Agency - ESDA )4) Contractor development = cidb registers = empowerment

and SME growth, EPWP learnerships and ECDP’s, DTI INDUSTRIAL STRATEGY - CONSTRUCTION SECTOR +_DTI-SEDA’s + ICT, cidb Industry performance.

5) Materials supply and manufacturing: Local/ abroad - Material manufacturing and pricing,

6) Research and academic excellenceAccelerated and Shared Growth StrategyAccelerated and Shared Growth Strategy


cidb All about a systems approach to

industry development To achieve double our output over

next 10 years we cannot function “business as usual’’ = Alternative delivery methods and Innovation needed by all !

IMPORTANCE OF SYSTEMS?

Systematic approach to progressive Systematic approach to progressive improvement!improvement!

development through partnershipIMPORTANCE OF SYSTEMS?


Construction Registers Service and their role in meeting the challenges

National Register of Contractors To drive improving performance of contractors

National Register of Projects (+ I-Tender) Promote client practices that shape a transforming, healthy and

sustainable industry Roll-out

Through Standard for Procurement Uniformity in Construction Future: Register of Professional Service Providers + Material suppliers

- Registers are the bridge between the 1st and 2nd economy- Registers are the grounding for long term sustainable employment- Our contractors are on the EPWP learnership programme and being

monitored- Incubator Dev Prog. is being provincially rolled out


Class of Works by gradingGrade

CE EE GB ME SW Total1 801 218 4,827 160 431 6,4372 183 50 613 46 46 9383 71 26 266 22 13 3984 111 37 170 22 12 3525 39 29 62 14 11 1556 49 7 51 8 12 1277 51 4 16 3 5 798 23 3 5 1 1 339 13 1 7 2 4 27

Total 1341 375 6,017 278 535 8,546CE Civil Engineering EE Electrical Engineering GB General BuildingME Mechanical Engineering SW Specialist Works

Class of works


Client tender adverts – automatically alerts tenderers (public sector clients)

Logging award of tender (or cancellation) – automatically updates contractor’s record (public and private sector clients eg. ICCF)

Information on projects nationally

- Register of Projects

Linking demand and supply

Fully automatic website Fully automatic website operation – creates operation – creates transparencytransparency


CLASS OF WORKS

No VALUE AVERAGE% BY

TOTAL

CE 29 R 5, 263, 206, 295.27 R 181, 489, 872.25 79.24 %

EE 9 R 158, 439, 459.63 R 17, 604, 384.40 2.38 %

GB 53 R 407, 911, 947.30 R 7, 696, 451.84 6.14 %

ME 23 R 810, 150, 899.32 R 35, 223, 952.14 12.19 %

SN 2 R 1, 090, 083.96 R 545, 041.98 0.01 %

SO 1 R 849, 063.33 R 849, 063.33 0.01 %

Grand Total: 117R 6, 641, 647,

748.81

Breakdown by Class of Works


Key conclusions from registers

Registers – living tool, continuous learning – significant adjustments made

Registration within 21 days (14) + 8500 contractors registered Bulk of work done by black contractors

(significant youth and women) Contractors get continuous work – able to

consolidate and grow Can identify capacity gaps & focus development

programmes for growth, capacity & performance = targeting development

Role of clients is key to delivery & development! Role of clients is key to delivery & development!


IMPLICATIONS- Need to double output over next 10 years- Coming out of history of declining investment- Need for infra-structure investment focus with maintenance- Streamlined procurement processes required

(RoC, RoP, IDIP,etc )

cidb CONTINUED WAY FORWARD

- Public Sector reform (IDIP + toolkit and guidelines)- Skills study and strategies (Promote & support workforce skills dev)- Maintenance strategy- Outreach centres based on partnership- cidb registers targeted Enterprise Development


Thank YouINFRASTRUCTURE DELIVERY FOR SOUTH INFRASTRUCTURE DELIVERY FOR SOUTH AFRICA’S ECONOMIC AND SOCIAL GROWTH AFRICA’S ECONOMIC AND SOCIAL GROWTH

A total delivery capability A proudly South African

construction industry An industry that delivers to

global standards

Strategic Leadershiptowards

sustainable job creation

Development through partnership Construction Industry Development Board Infrastructure for South...

Documents

Transcript of Development through partnership Construction Industry Development Board Infrastructure for South...