South Africa

Blackmail, interference partly to blame for construction industry job losses

Blackmail, interference partly to blame for construction industry job losses
Blackmail, objections and interference in building projects are partly to blame for the huge job losses in the construction industry.

There were 142000 job losses in the construction industry in the first quarter of the year, compared to the fourth quarter of 2018, Statistics SA (StatsSA) has announced.

StatsSA’s Quarterly Labour Force Survey said this contributed to the official unemployment rate increasing by 0.5 of a percentage point.

“The increase in the unemployment rate is a result of a decline of 237000 in the number of people in employment and an increase of 62000 in the number of people who were unemployed between the fourth quarter of 2018 and the first quarter of 2019,” said StatsSA.

Cape Chamber of Commerce and Industry president Geoff Jacobs said some of the big construction firms were financially stressed.

“There are several reasons for this decline. One of them is that the government does not have the money to finance some new infrastructure projects or it cannot make up its mind.

“In Cape Town, we have seen the huge Foreshore freeway development project called off because the City of Cape Town got the tendering procedures wrong,” said Jacobs.

He said objections by the public could also cause delays.

“The possibility of projects being held up by campaigning objectors discourages investment and job creation. Some objections are perfectly valid, but others can be frivolous,” he said.

An example of the blackmail companies are subjected to was a joint venture between construction companies Aveng and Strabag International to build the Mtentu Bridge Project, worth R1.63billion, that fell through.

In February, Aveng announced that the contract with the SA National Roads Agency (Sanral) had been terminated due to threats of violence and levels of community unrest related to demands made against Sanral.

Economic Opportunities MEC Beverley Schäfer said: “Blocking, delaying or the destruction of projects is costly and impacts investor confidence in the region, both of which could impact on the industry’s ability to create and sustain jobs in the future.”


Cape Argus