Sanral softens stance on BBBEE

The South African National Roads Agency (Sanral) appears to have softened its stance on only doing business on capital projects with companies that were at least 51 percent black-owned and with a minimum broad-based black economic empowerment (BBBEE) Level 2 rating. These requirements formed part of Sanral’s draft transformation policy, which was launched in September together with the agency’s draft Horizon 2030 strategy. Vusi Mona, a spokesperson for Sanral, said yesterday that the agency was not dogmatic about the 51 percent black-ownership requirement and it was Sanral’s opening position. “We are open to persuasion,” Mona said. “People who say it is not going to work need to convince us and what are realistic targets and the timelines. “I get the sense that Skhumbuzo (Sanral chief executive Skhumbuzo Macozoma), the executive committee and the board will be open to that.”

The 51 percent equity ownership level specified in Sanral’s draft policy is not aligned with the agreement reached between the government and seven listed construction companies in terms of the Voluntary Rebuilding Programme (VRP) agreement. The VRP agreement included a collective payment by the seven companies of R1.5billion over 12 years to a socio-economic development trust and to undertake further transformation initiatives. These initiatives involved either becoming “fully transformed” with at least 40 percent of equity in the hands of black South Africans or a commitment to significant mentoring initiatives for up to three emerging black-owned enterprises. Sanral’s draft transformation policy also anticipates a maximum of 15 tenders a year being issued to a single company and contractors being required to make use of Sanral-approved contractors. Mona said Sanral had conducted 34 stakeholder engagement sessions across the country and was analysing the input and divergent views expressed to incorporate it in the draft policy before submitting it to the transport minister for consideration and submission to the cabinet for final approval.

He said the major construction companies had pointed out that much was mentioned about the exclusion of the small contractors in the draft policy and asked what was the future of the big construction firms. Mona said the draft policy was seen as a threat to the major construction firms, but this was not Sanral’s intention. “We don’t want to destroy the big guys because for transformation to happen, you have to have the big guys to hold the small guys by the arm in terms of mergers and skills transfer. If you destroy established business, who is going to do the skills transfer?” he said. Mona said the construction industry needed to provide Sanral with a view on how it believed the agency should accommodate the small emerging black contractors. He said some of Sanral’s projects in KwaZulu-Natal, for example, were coming to a standstill, because people were demanding inclusion. Mona said that there were two groups among them.

“There were those who thought they were entitled to get work, but did not necessarily have the skills and could be dismissed, and the Construction Industry Development Board grade three and four contractors who Sanral and the major construction companies should be sympathetic towards,” he said. Mona said that there was an ambitious timeline of April 1 this year for the approval of Sanral’s draft transformation policy, but realistically this timeline would not be met. He said the wheels of government turned slowly and it could not be assumed that the transport minister or the Cabinet would merely rubber stamp it. In addition, the current term of Sanral’s board expired at the end of this month and the new board would have to familiarise itself with Sanral before taking any policy decisions, he said.