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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
development through partnership
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
development through partnership
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
development through partnership
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 !
development through partnership
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
Construction Industry Development Board
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.
development through partnership
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!
development through partnership
Other development programmes
+ EPWP
Manufacturing
Alternative Technologies and Service Delivery
Models
Skills
CIDB Enterprise
And Contractor Development
Framework
Converging focus towards Contractor Development
Construction Industry Development Board
MaterialSuppliers
development through partnership
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)
Construction Industry Development Board
development through partnership
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.
development through partnership
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
development through partnership
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
development through partnership
• 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
development through partnership
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
Construction Industry Development Board
development through partnership
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
Construction Industry Development Board
development through partnership
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)
development through partnership
ASGISA
ACCELERATED GROWTH
GEARING FOR DELIVERY
JOB CREATION
EMPLOYMENT
SKILLS
Accelerated and Shared Growth StrategyAccelerated and Shared Growth Strategy
development through partnership
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
development through partnership
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
development through partnership
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?
development through partnership
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
development through partnership
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
development through partnership
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
development through partnership
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
development through partnership
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!
development through partnership
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
development through partnership
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
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