Pioneering change in construction

SANRAL has introduced a contractual clause that requires big companies to partner with small companies when bidding for construction projects.

The South African National Roads Agency (SOC) Limited (SANRAL) is trying to level the field in the construction industry one clause at a time.

One of the biggest challenges facing emerging companies in the construction industry is competing with established companies for big projects.

In trying to level the playing fields, SANRAL has introduced a contractual clause that requires big companies to partner with small companies when bidding for construction projects.

This is part of the agency’s vision of empowering small businesses and affording them an opportunity to grow and contribute to infrastructure development.

Joint venture condition: A first of its kind

The joint venture condition was first introduced when two contracts to rehabilitate sections of the R573 Moloto Road were awarded.

The job required big contractors to bid with smaller companies in a joint venture.

According to Nontobeko Mathenjwa and Lawrence Chauke, SANRAL project managers on the Moloto Road, this is the first of its kind and took a lot of planning and consultation to get approval from SANRAL.

“This is a SANRAL initiative. We had no reference or prior experience of implementing this model. It was really exciting to practically develop words and phrases to incorporate into our procurement documentation. I’m glad that it’s working and opening up the industry to small businesses,” said Mathenjwa and Chauke.

In the Limpopo section of the project, a contract was awarded to two partners, KPMM and Chauke Business Enterprise (CBE). On the Mpumalanga section a contract was awarded to a joint venture among four companies: Raubex Construction, Themolo Business Enterprise, Khuluphala Tradings and Biz Afrika.

Big business agrees

Although it was business unusual for big companies, they agree that it’s a great initiative.

“We are happy to take on emerging companies, but they have to play ball and make use of such opportunities. That means no compromise on quality and reliability, so it’s important to attract the partners for the [joint venture],” said Kevin Padayachee, operational director for KPMM.

Emerging companies equally agree that through the joint ventures, they are being empowered and they have become more professional.

Adam Chauke, owner and managing member of CBE, said: “It’s not easy to form partnerships with big companies and sometimes they don’t like to empower us – for fear of competition. But thanks to SANRAL, the likes of KPMM are now required to approach us for partnerships. It’s truly remarkable because it opens up the industry and affords us the opportunity to grow.”

From the experienced gained on the project, the SMMEs will be able to grow their grading at the Construction Industry Development Board (CIDB) and compete for bigger contracts in the future.

SANRAL will continue to support this initiative and introduce it for all other projects going forward.