MEDIA RELEASE

SANRAL aims to empower black economic industrialists through Contractor Development Programme

Caption: Tshegare Moletsane, SANRAL’s Transformation Officer, explaining the importance of the Black Industrialist Scheme

Kimberley 27 October 2024 – The South African National Roads Agency SOC Limited (SANRAL) on Friday introduced its Contractor Development Programme (CDP) to black contractors in the Northern Cape.

This initiative forms part of SANRAL’s broader Horizon 2030 Strategy and Transformation Policy, which seeks to foster the growth of black industrialists across the construction value chain.

SANRAL’s Chief Corporate Affairs Officer, Lehlohonolo Memeza, introduced the CDP to the local construction community, emphasising SANRAL’s commitment to transforming the sector.

The construction industry plays a vital role in shaping the socio-economic landscape of South Africa, and SANRAL is keenly aware of its potential to uplift communities through job creation and business opportunities.

“If an infrastructure doesn’t have pillars, it will collapse,” said Memeza. “We’ve seen we can’t operate if we don’t make transformation our centre and stronghold, so it’s been elevated to a pillar, and this Contractor Development Programme accompanies it.”

Thandi Solo, a representative of the South African Women in Construction organisation (SAWIC) and a contractor, commended SANRAL for its dedication to promoting transformation within the construction industry.

Solo remarked, “I appreciate SANRAL for the good work you are doing by actively prioritising transformation, particularly by targeting women.”

In alignment with SANRAL’s transformation goals, Tshegare Moletsane, SANRAL’s Transformation Officer, emphasised the importance of nurturing black industrialists within the sector.

“An industrialist is vital to us because we don’t want a situation where, when part of the construction value chain encounters challenges, the Contractor Development Programme, and ultimately SANRAL, suffers,” Moletsane explained.

He elaborated on the role of black industrialists, saying, “A black industrialist is a producer. You are not going to be constrained by anybody, you are going to produce to your maximum.

“We really want you guys in the next five years to match the big fives, to really resource you, to give you a platform that you can really prove yourselves and grow. That’s a mindset that we want to move you away from being a subcontractor mentality to really start playing with the big boys. We really need your support and your focus.”

The CDP specifically addresses the challenges faced by contractors in the “missing middle” of Construction Industry Development Board (CIDB) grades, focusing on grades 5CE to 7CE.

These contractors often face difficulties in securing work, obtaining experience and developing their businesses. The programme aiming to bridge these gaps by providing contractors with access to SANRAL projects, as well as critical support such as training, mentoring and financial assistance.

The purpose of the programme is to:

• Provide a platform for CIDB grades 5 to 7 contractors to maximise participation and skills development.
• Include emerging contractors with potentially emerging (PE) status in tender documents.
• Create opportunities for recently upgraded CIDB grades 8 and 9 to gain experience and participate in SANRAL projects.
• Offer training, mentoring, financial support, and other resources to ensure contractor growth and sustainability.
• Improve the grading of participating contractors by at least one level over five years.

By implementing this programme, SANRAL aims to improve the overall performance of contractors in terms of financial viability, innovation, competitiveness, quality, and employment practices.

Additionally, the CDP is designed to increase the participation of black women, people with disabilities, youth and military veterans in SANRAL projects. This will create a more inclusive construction industry that reflects the diversity of South Africa.

Memeza elaborated on SANRAL’s vision. “We want to be sure that we develop black construction companies. Our goal is to create an environment where these contractors not only obtain work but do so continuously through a competitive process.”

The CDP is a cornerstone of SANRAL’s commitment to ensuring that South Africa’s infrastructure is built by a skilled, diverse, and sustainable workforce.

Through this programme, SANRAL envisions a future where local small, micro, and macro enterprises (SMMEs) play a central role in the construction and maintenance of the country’s road infrastructure, while creating lasting economic benefits for all South Africans.

As part of the programme’s intended developmental outcomes, SANRAL aims to:

• Elevate the grading of participating contractors.
• Ensure ongoing participation and work opportunities for these contractors through competitive processes.
• Promote best practices in financial management, safety, and environmental responsibility.

With the launch of the Contractor Development Programme, SANRAL is taking decisive steps towards realising its Horizon 2030 vision of a transformed and inclusive construction industry.

An audio clip with English sound is available here: https://we.tl/t-HujNrlKFHg

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FURTHER BACKGROUND:

The CDP also aims to improve the financial, technical and managerial skills of participating contractors, ultimately leading to an upgrade in their CIDB grading and long-term sustainability.

The CDP will be implemented across various SANRAL projects, with a focus on both road construction and routine maintenance work. Contractors selected for the programme will be supported through a combination of practical training, mentorship and financial assistance.

One of the key features of the CDP is the inclusion of an interest-free loan from SANRAL, amounting to between 15% and 20% of the contract value. This funding will help contractors manage their working capital needs, particularly at the start of projects. Additionally, SANRAL has established partnerships with various funding institutions and equipment suppliers to provide further support to contractors.

In terms of project participation, SANRAL’s procurement policies will ensure that selected contractors are allocated projects within their province of residence, or, if necessary, in neighbouring provinces. Each contractor will participate in the programme for a minimum of three years, with the opportunity for a maximum of five years.

As with all SANRAL projects, the CDP will be subject to rigorous monitoring and evaluation. SANRAL is committed to ensuring that the programme delivers on its transformation agenda, and that participating contractors are able to graduate from the programme with enhanced skills, financial stability, and a stronger CIDB grading.

SANRAL will establish a steering committee to oversee the implementation of the CDP, comprising representatives from engineering, procurement, finance, legal and transformation departments. This committee will ensure that the programme remains aligned with SANRAL’s strategic objectives and that contractors receive the support they need to succeed.