SANRAL introduces Contractor Development Programme to Western Cape

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SANRAL introduces Contractor Development Programme to Western Cape

Cape Town, 23 October 2024 – The South African National Roads Agency SOC Limited (SANRAL) on Wednesday introduced its countrywide Contractor Development Programme (CDP) to black-owned businesses in the Western Cape. The programme aims to create opportunities for qualifying black contractors to be taken up into an incubation programme designed to support, develop and grow subcontractors to ultimately become main contractors.

SANRAL’s Head of Stakeholder Relations, Mr Siphiwo Mxhosa, said the new CDP would assist in ensuring that black (African, Coloured and Indian) contractors were given the necessary support to grow and develop.

Mr Mxhosa said: “SANRAL’s new Contractor Development Programme takes into account the fact that South Africa is the most unequal country in the world, and it is a Constitutional imperative for us to assist in levelling the playing fields. SANRAL is not in the business of destroying white established companies and creating black-owned companies. No, SANRAL is creating a balanced country, and we are doing justice to the real demographics in this country.”

“The majority of the most depressed and frustrated, poverty-stricken people in South Africa are not benefitting from the massive infrastructure-build economy. SANRAL is disbursing multi-billion rand tenders every year. We’re doing this work but it benefits too few. We have no intention to eliminate this few but we want to be fair and want to ensure that young people, women, people with disabilities and military veterans – all these vulnerable sectors of our society – must benefit from participating in this industry. We must be fair and let as many people and companies as possible benefit from the work that SANRAL is creating in the construction industry.”

Speaking to business owners in attendance at the Durbanville Conference Centre, SANRAL’s Chief Corporate Affairs Officer, Lehlohonolo Memeza, explained SANRAL’s intention behind the CDP to contractors. The CDP is a new initiative by SANRAL which aims to increase the capacity, equity ownership and sustainability of emerging contractors in Construction Industry Development Board (CIDB) grades 5CE and higher. Grade 5CE companies have typically completed projects of between R6m and R10 million.

“We cannot do transformation by ourselves. We need committed contractors and potential MOU partners to hold hands with us and make this programme work. We want to see contractors on this programme grow by at least one or two grades as a result of the financial support, mentoring, training and capacity building,” said Ms Memeza.

SANRAL’s Western Region Manager, Randall Cable, encouraged contractors to take up the opportunities which the national roads agency is creating, noting that the region has a healthy pipeline of work that would significantly impact the road construction sector. Mr Cable had in September announced more than R6 billion worth of work in the market for the Western Cape and Northern Cape alone.

The Contractor Development Programme aims to:

  • Create a unique platform for CIDB grades 5 to 7 to maximise participation and skills development, addressing the challenge of ‘the missing middle’ CIDB grades.
  • Include potentially emerging (PE) status in SANRAL’s tender documents.
  • Develop a platform for recently upgraded CIDB grades 8 and 9 to participate on SANRAL projects, gaining necessary experience and support.
  • Provide training, mentoring, financial and other forms of support to contractors participating in the programme.

An audio clip with English sound: https://we.tl/t-Y20VOa4Ttl

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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.