Masombuka’s challenge in directing transformation of the construction sector

Thabo Masombuka, the new CEO of the Construction Sector Charter Council (CSCC), has his work cut out for him as he takes up the role of transforming what is arguably one of the most conservative industries in the country.

Not only is Masombuka facing serious industry specific challenges but he is also coming up against general fatigue over the confusing barrage of sector focused charters. The former director within the BEE division of the Department of Trade and Industry (DTI) was appointed to the CSCC post this month and has already made curious comments.

In the statement announcing Masombuka’s announcement the CSCC said it will, amongst other things, serve as a catalyst driver for transformation and facilitate the creation and empowerment of more black owned contracting firms in the industry, with skills, capacity building and competitiveness being the underlying focus.

Masombuka was quoted saying the time for pedestrian transformation movement is over for the construction sector. He said the sector went into a lull after the charter was enacted in 2009. This was partly because the CSCC was still busy preparing the ground, putting in place systems and structures. As such his installation signals that the CSCC was ready to roll. He suggested that there will be no place to hide for companies who are not taking BBBEE seriously.

His major challenge can be best captured through an old adage: He who pays the piper calls the tunes. Masombuka may soon find out the realities of this adage which partly captures the criticism directed at the general transformation charter brigade. Charter councils are styled as enforcers of BBBEE in their particular sectors but they are largely indebted to large corporations, the very same corporations they must police.

In the construction sector the CSCC is likely to be funded through contributions or levies from industry association. According to the CSCC statement the organisation is made up of 17 constituency organizations. These include mainstream industry bodies like the South African Federation for Civil Engineering Contractors, South African Institute of Architects, Southern African Institute of Steel Construction, Consulting Engineers South Africa, Association of South African Quantity Surveyors, Electrical Contractors Association South Africa, Master Builders South Africa etc. These are highly organized and well funded entities. It can be expected that it is largely their funds which will run the office of the CSCC.
The CSCC also features organisations which hope to benefit from its transformation agenda like the African Builders Association, National Association of Black Contractors & Allied Trades and the National Federation for the Building Industry. These organizations can serve to counter balance the influence of the establishment. History is not on the side of this hope as can be drawn from the experiences which led to the collapse of the Business Unity SA marriage.

Critically the CSCC is also patronised by the department of public works which is seen to be thee defector regulator of the construction industry. The department has this tag because it houses the construction industry development board and is also a market maker through its public works programmes.

Masombuka’s work will be easier if the entire public sector comes to the party. But then there is the matter of the preferential procurement policy framework act (PPPFA) which is preventing this to happen. The public sector is a significant player in the construction sector and its role is set to be more pronounced as government prepares to roll out its massive infrastructure development plan.  But transformation activists are pointing out that government’s talk to infuse meaningful BBBEE into the infrastructure development programme is set to be hampered by the PPPFA.

In its statement the CSCC says “With government infrastructure spending set to increase over the next few years, the construction industry is expected to play a critical role in driving transformation and empowerment”.

The organisation added that “Regarded as one of the biggest contributors in the country’s GDP, the construction sector has recently undergone serious challenges influenced by the global economic slowdown, and the lack of state infra-structure spending. This has led to many Small Medium Enterprises (SMEs) closing shop after the 2010 world-cup infrastructure boom. “As the result, the absence of accurate information regarding the performance of the Construction industry on transformation has resulted in the widely held perceptions that this sector is the least transformed in South Africa”.

“The role of the CSCC is therefore important in not only ensuring that the industry transforms, but also in providing accurate information regarding the status of BBBEE since 2009 when the Charter was gazetted”.

The organisation added that “A lawyer by profession, Masombuka’s appointment will be critical in driving the industry’s readiness and commitment towards this process. His legal background and wealth of BBBEE experience will be the instrumental in helping achieve the objectives set out by the construction charter council”.

Masombuka is also facing the growing fatigue around charters. Key stakeholders within the BBBEE landscape are arguing that charters are distraction and cause confusion in the empowerment space. They are pushing for the country to have a single BBBEE regulation being the BBBEE codes of good practice. That is more so because the codes are now being amended with an objective of closing loopholes. This will live charters as outdated transformation documents. Aligning them to the codes will take a long time and as such displace the implementation.

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