Transcript Construction Industry Development Board

cidb
Portfolio
Committee
(Public Works )
13 March 2006
Gerard Naidoo
Infrastructure for
South Africa’s
economic and social growth
Construction Industry Development Board
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 development
development through partnership
SA Backlogs - progress
Estimates 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
2005 State of the Nation Address by President Thabo Mbeki
+
Dep. Pres. = ASGISA
+
Minister Trevor Manuels budget speech
development through partnership
THE MARKET GROWTH TREND
SOUTH AFRICAN CONSTRUCTION ECONOMY
SOUTH AFRICA GFCF as a % of GDP
30.0%
28.0%
GFCF % GDP
26.0%
24.0%
22.0%
20.0%
18.0%
16.0%
14.0%
12.0%
2013
2010
2007
2004
2001
1998
1995
1992
1989
1986
1983
1980
1977
1974
1971
1968
1965
1962
1959
1956
1953
1950
1947
10.0%
The need to more than double our output in the next 10 years !
development through partnership
CHALLENGES AND OPPORTUNITY !
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.
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.
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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
development through partnership
Our Strategic Challenge
Empowerment
Growth
Sustainable enterprises
and emergence into
mainstream economy
Capability
Skills & systems efficiency
convergence
in Enabling
focus
regulatory &
Delivery
development
environment
Consistent procurement
& delivery environment
Performance
to drive improved value
to clients and society!
Quality, safety, health and
environment, employment
development through partnership
Converging focus towards Contractor Development
Other development
programmes
+ EPWP
Skills
Alternative Technologies
and Service Delivery
Models
CIDB
Enterprise
And Contractor
Development
Framework
Material
Suppliers
Manufacturing
Construction Industry Development Board
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
Our Strategic Challenge
The ability of the construction industry
Empowerment
to deliver
will affect job Growth
creation in all
sectors and feed directly into the goals
of ASGISA
“A key development constraint lies in the
dispersed nature of the industry and its
Capability
clients –
Delivery
cidb has developed a range of
instruments & programmes that will
drive convergence in development focus”
Performance
development through partnership
Contractor development as key to the cidb Mandate
Objectives
ENABLERS
• A growing contracting capacity to deliver on SA infrastructure
• Improved performance of contractors
• Sustainable empowerment and development
Streamline Client
Procurement
Skills dev
National Construction
Week
Finance
Delivery Mgt
Charter Process
CIDB Registers (CRS)
Client Development
Programmes
Affirmative
Procurement
South Africa’s construction output will need to double in less than 10 years !!!
development through partnership
Construction Industry Development Board
development through partnership
Possible stakeholder linkages for
sustainable impact
DPW (+
EPWP)
CETA
CIDB
& other Public
Sector
Clients
Financial
Institutions
Participating
Registered g
Contractors
DTI
Other
Stakeholders
Development
Agencies/Servi
ce Providers
Materials
Suppliers
Established
Industry &
Private Sector
Construction Industry Development Board
development through partnership
Proposed Construction Sector Interventions
(Short-Medium Term)
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

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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 CREATION
Labour 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 & procurement
Toolkit – 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 Strategy
development through partnership
CIDB ROLE IN ASGISA IMPLEMENTATION
 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 shortage
CIDB 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
Accelerated and Shared Growth Strategy
development through partnership
PROPOSED ASGISA INTERVENTIONS
1) Public sector procurement reform & delivery Management
2) 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 excellence
Accelerated 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 !
Systematic approach to progressive improvement!
IMPORTANCE OF SYSTEMS?
development through partnership
IMPORTANCE 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 grading
Grade
Class of works
1
2
3
4
5
6
7
8
9
CE
801
183
71
111
39
49
51
23
13
Total
1341
EE
218
50
26
37
29
7
4
3
1
GB
4,827
613
266
170
62
51
16
5
7
ME
160
46
22
22
14
8
3
1
2
375 6,017
278
SW
431
46
13
12
11
12
5
1
4
Total
6,437
938
398
352
155
127
79
33
27
535 8,546
CE Civil Engineering EE Electrical Engineering GB General Building
ME Mechanical Engineering SW Specialist Works
development through partnership
- Register of Projects
Linking demand and supply
 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
Fully automatic website
operation – creates transparency
development through partnership
Breakdown by Class of Works
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 %
117
R 6, 641, 647, 748.81
Grand Total:
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!
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
Strategic Leadership
towards
sustainable job creation
 A total delivery capability
 A proudly South African
construction industry
 An industry that delivers to
global standards
Thank You
INFRASTRUCTURE DELIVERY FOR SOUTH
AFRICA’S ECONOMIC AND SOCIAL GROWTH
development through partnership