 
LAUNCH OF THE PROVINCIAL VUKUZAKHE COUNCILAddress by Mr S’bu Ndebele MEC for Transport KwaZulu-Natal 05 April 2004, ICC - Durban Deputy Mayor of Thekwini- Councillor Loggie Naidoo
We have come together this evening to launch the Provincial Vukuzakhe Council. The launch of this Council marks an historic event in the development of the emerging contractor sector in KwaZulu-Natal. We welcome the participation of representatives from the small freight transport sector in our celebration. Their presence bears testimony to the progress made by the KwaZulu-Natal Department of Transport’s broad based approach to black economic empowerment and support for the small and emerging business sectors. It is not my intention tonight to outline the KwaZulu-Natal Department of Transport’s history of progress in supporting disadvantaged population groups and communities to grow and to prosper and to share in the miracle that is South Africa today. The fact that so many newly established business enterprises are represented here is in itself indicative that you have been in a position to take advantage of the new policy frameworks, procurement frameworks and contract opportunities that my department has put on offer since 1994. My address tonight will focus much more on the challenges that we are likely to face during the next ten years of democracy. We must not fool ourselves. The struggle to liberate our economy in South Africa will be no less bitter than the struggle to liberate our country to democracy. I need not remind you that despite "Ten Years of Democracy" and despite "Ten Years of Prosperity" there are glaring economic inequalities within South Africa both in terms of ownership of the economy and income distribution. Black ownership of the Johannesburg Stock Exchange is estimated to be about 3% while the country’s 4,4 million whites (11% of the population) earn some 44% of the country’s net income. (In terms of the Black Economic Empowerment on the Johannesburg Stock Exchange, it must be emphasised that the movers and shakers such as Cyril Ramaphosa, Tokyo Sexwale , Mzi Khumalo are all people with strong leadership qualities and well connected networks. Yet in ten years they have only succeeded in securing a 3% share of the JSE.) Here I must emphasise that the environment to promote Black Economic Empowerment in the construction and transport industry in the next ten years of democracy is much more critical than the first ten years of democracy. The reasons for this are:
The debate, then, is not so much on the desirability of black economic empowerment but on the process of how this is to be achieved and, in particular, on government’s role therein. The role of government in the growth and development of the construction industry in South Africa is unique. The reason for this is that we are both the referee and a player. In the role of referee we are expected to ensure that people play by the rules and that there is fair play. In other words, government’s role is to establish appropriate regulatory frameworks and policies and to develop the institutions that ensure that they are implemented. However, the public service in South Africa accounts for some 40% of all construction spending. This means that government can have a major influence on how the construction industry develops because government gives out 40% of the contract values that sustain the industry. This makes government an important player. Government’s role in the construction industry is unlike its role in any other critical sector of our economy. For example, government has recently passed legislation to regulate the mining industry in South Africa. But government is not in the market place of mining. Government, in South Africa, is not an investor in the mining sector nor does it build or operate mines. Government’s role, then, in determining the fate of the construction industry in South Africa is a delicate one. As the MEC for Transport in KwaZulu-Natal I have always advocated the view that to secure the transformation from a racial economy to a representative economy, government must necessarily go beyond its responsibility of acting as regulatory body to one that intervenes to reverse our historical legacy in order to create an economic identity for previously disenfranchised population groups, especially the black majority. During my tenure as MEC for Transport my department has systematically developed new policy frameworks to regulate the transformation of the transport and construction sectors in KwaZulu-Natal. A distinguishing feature of my tenure has been to set aside budgets that specifically target black economic empowerment. This has created a protected environment for new market entrants who are required to tender and compete only against other genuine new market entrants. It is this that makes Vukuzakhe unique. Vukuzakhe’s regulatory framework goes beyond the generally applied preferential procurement system by setting aside a budget that is reserved for Vukuzakhe contractors. Removing barriers to market entry is one thing. Removing barriers that constrain performance is an entirely different ballgame. All Vukuzakhe contractors present tonight know only too well that the joy of winning a contract is quickly moderated by the difficulty contractors face in procuring appropriate technical and business expertise, plant, supplies and credit to ensure the profitable management and execution of the contract. There is no doubt in my mind that the establishment of Vukuzakhe Associations and their establishment of a Provincial Vukuzakhe Council will create a new powerful voice for emerging contractors in the construction industry. I hope that, at the very least, it will provide the KwaZulu-Natal Department of Transport with an effective body through which we can communicate and channel our commitment to secure a truly representative construction industry in KwaZulu-Natal. I am concerned that the race and gender profile of registered engineers and technicians with the Engineering Council of South Africa continues to be dominated by white males (91% registered are white and 98% registered are male (2002)). It is for this reason that I have directed my department to establish a new bursary fund, which will be administered in consultation with the Provincial Vukuzakhe Council, to promote engineering in the black community. I am also concerned that access to reliable and affordable plant is constraining the performance of Vukuzakhe contractors and restricting profit taking. We have experienced several setbacks in our plans to establish plant depots that can be eventually owned and managed by Vukuzakhe contractors. I am therefore pleased to inform you that we are receiving tremendous assistance from National and Provincial Treasury in establishing a Public / Private Partnership (PPP) which will meet the plant needs of emerging contractors. We have now appointed a transaction advisor for the development of a PPP for the provision of plant to emerging contractors. Vukuzakhe – rise up and build yourselves. The struggle to share our economy more equitably and to transform the construction industry has only just begun. Your performance as Vukuzakhe Associations and as the Provincial Vukuzakhe Council will be critical to its successful transformation. We will be with you in your struggle to build truly inclusive Associations and as truly representative Provincial Vukuzakhe Council. The Department will be hosting you to a symposium, which will focus on the inclusive and democratic development of Vukuzakhe Associations and the Council. Together we will develop a plan of action that will strengthen the emerging contractor sector and ensure that it truly does emerge. Without strong grassroots institutions it will be difficult to meet the many challenges that will undoubtedly confront emerging contractors now that investing in infrastructure development is firmly on government’s agenda. Thank you.
|
