Calls have been made for policy, laws and procedures to be amended to address the construction mafia, which poses a huge burden on the South African economy and hampers foreign investment.
The call to action was made by Professor Irrshad Kaseeram, from the University of Zululand’s Economics Department, in reaction to the joint decision announced on Friday by Public Works and Infrastructure Minister Dean Macpherson and his provincial counterpart, Public Works MEC Martin Meyer, to hold an urgent meeting.
The department is set to convene a national summit in KwaZulu-Natal to address the ongoing challenge posed by the construction mafia and to formulate a comprehensive plan that will safeguard the business sector from significant financial losses and stimulate economic growth.
Kaseeram said recent calculations indicate the significant financial burden imposed upon the business sector and the South African economy by the construction mafia amounts to almost R70 billion.
“This estimated cost is merely the tip of the iceberg,” he said.
He said the intimidation, assaults, damage to property, emotional trauma, medical treatment and loss of work hours due to protests further exacerbate the true magnitude of the problem.
“Further incalculable long-term losses include building projects put on hold or scrapped, the disinvestment and deterred investment to other international destinations cannot be estimated,” said Kaseeram.
On Sunday KZN provincial police spokesperson Colonel Robert Netshiunda, said five suspects aged between 28 and 44, were arrested for disturbing activities at a construction site where a bridge is under construction in Msunduzi.
“On arrival at the scene, police arrested the five suspects and they were duly charged for intimidation as well as the disturbance of a construction site.”
In another incident, the Durban High Court recently ordered two men responsible for inciting community members to disrupt operations at chemical manufacturing plant Safripol (Pty) Ltd, in Mobeni-West in Durban to refrain from such activities that cost the company R12 million per day of lost production.
The “ringleaders” claimed favouritism and nepotism with regard to the hiring of part-time workers to a sub-contractor working at the plant. They resorted to rallying community members to barricade the business entrance with tyres and debris on various days to assert their stance.
In 2022, a group of armed suspects, believed to be from a business forum, forced their way on to a Durban High Court construction site and chased workers and contractors away.
The project, which is expected to be completed in September 2025, encountered delays as a result and the site was placed under heavy security protection which resulted in unbudgeted costs being incurred.
Kaseeram said it is not surprising that South Africa struggles to attract scarce foreign investment due to the overall negative perceptions that international investors form about the lawlessness in the country, inefficiencies of the SAPS and poor governance in general.
According to Kaseeram, the National Infrastructure Plan 2050, which was created for economic growth, business promotion and job creation, is in jeopardy.
He further explained that the mafia arose out of the 2017 preferential procurement regulation that provides for a 30% stake in a construction development for local communities around the construction site to benefit.
“Many cases went to court that established this clause is misinterpreted for extortion purposes. Hence we hope that this clause is suspended until all stakeholders are consulted and it is clearly explained and operationalised as to how relevant communities can access the benefits,” said Kaseeram.
Kaseeram said the court procedures and law need to be more effective to bring alleged extorters to book.
The department said the planned meeting will include all the respective MECs from all provinces and the ministers in the law-enforcement cluster.
“It is imperative to host this important meeting to develop a comprehensive plan to turn the tide against the construction mafia to not only attract additional infrastructure investment but protect the lives of our people,” said Macpherson.
The Mercury