Confidence in the construction industry has been erratic since 2020, compelling several industry players to close, and those who remain are exposed to risk, vigilante action and skills shortages; however, government’s stated commitment to making regulatory changes and spend on infrastructure does provide some light at the end of the tunnel, construction company GVK-Siya Zama says in a statement.

“The industry needs a major boost to regain the prosperity of a decade ago. Much needs to be done to improve investor confidence and boost the industry. Here, the government has a major role to play. The finance minister’s announcements at the recent budget speech bode well for the industry - if they play out according to plan,” says GVK-Siya Zama CFO John de Sousa.

De Sousa’s comments come as GVK-Siya Zama marks its 30-year anniversary since inception in 1994, coinciding with the birth of democracy in South Africa. Since then, it has evolved into one of the largest privately-owned construction companies in the country.

De Sousa says the advent of a democratic South Africa held much promise three decades ago, albeit with many unknowns for investors at the time.

“It also presented an opportunity to address and redress inequality in terms of infrastructure and services; and along with that change, shift the emphasis in public spending.

“In those early days, there was a major drive by the government to invest in infrastructure, hospitals, education facilities and the type of projects that would cement the leadership’s foothold in the country. This focus was unfortunately at the cost of unseen infrastructure such as pipelines and reticulation, roads, bridges, water and electricity, challenges that the country is now having to deal with – 30 years on,” he explains.

De Sousa says the State needs private sector participation to accelerate projects.

“Any vehicle or relaxation of rigid structures and requirements – such as the government’s intention to amend the public-private partnership (PPP) regulatory framework – will help to reduce procedural complexity of undertaking PPPs and contribute to more streamlined delivery of projects,” he suggests.

In addition, government’s recent budget announcement that it plans to invest more than R943-billion in the refurbishment and maintenance of existing assets and the building of new public infrastructure is welcomed by GVK-Siya Zama.

“This is a promising move by government, and we’ll watch the space with keen interest,” De Sousa says.

He mentions that the company applauds government’s plans to transform municipalities into engines of growth through the tightening of budget processes, ramping up of oversight, increasing skills and capacity of municipal employees, and driving investment in maintaining and building infrastructure.

“It’s no secret that in recent years municipalities have not been great at managing finances and delivering projects. Any focus on municipal governance and the eradication of corruption and ineptitude will go a long way towards addressing these challenges,” notes De Sousa.

Looking at the sector as a whole, he says there is enormous pressure on the private sector to finance and move projects forward.

“On the flip side of the coin, there is counter pressure from labour as government considers the privatisation of State-owned entities. Government is in a bind. It knows what needs to be done, but dealing with these opposing forces on the ground inevitably slows the process down. Decisive action is, however, needed to ensure a sustainable industry,” he emphasises.

He says economic growth, population growth, increasing unemployment and shrinking public sector spend place even the most reputable contractors in a precarious position.