South Africa: Committee On Trade Welcomes Legislation Criminalising 30 Percent Demands On Government Projects

28 November 2024
Parliament of South Africa (Cape Town)
press release

The Portfolio Committee on Trade, Industry and Competition has welcomed the move to criminalise the demands of the construction mafia for 30% share on government projects, by people without contributing any form of work.

The Chairperson of the committee, Mr Mzwandile Masina, said the 30% is an empowerment measure for small, medium and micro enterprises who are mostly alienated from infrastructure projects, but has turned into extortion by these groups."

He said: "The government allocates 30% of the value of projects to smmes with a view to empower them, and those they employ. Unfortunately, this has led to thuggish behaviour with criminals demanding payment and bringing projects to a halt.

"The committee supports strong action against anyone involved in such practices and misuses this empowerment measure for their own gains."

The committee received a briefing today from the National Treasury on the Public Procurement Act and its role in contributing to industrialisation, inclusive growth and transformation. The National Treasury informed the committee that the behaviour by the construction mafia was a challenge and has often resulted in contractors leaving the sites before projects are completed.

The Department of Trade, Industry, and Competition, and the Department of Performance Monitoring and Evaluation clarified their roles in ensuring compliance with local content designations and transformation objections as empowered by the Procurement Act.

Mr Masina said it concerned the committee that a vast number of infrastructure and housing projects got hijacked in the name of 30% and were therefore abandoned.

"This intervention was never intended for criminals, but well-meaning South Africans who want to come into mainstream economy, be equipped with skills, and grow. This frustrates the good intentions of government, and we call on law enforcement to act when the regulation is operationalised," emphasised Mr Masina.

The committee condemned this kind of extortion and was of the view that the government had left a loophole for too long. "It is time to clamp down on this kind of criminality," emphasised Mr Masina.

Read the original article on Parliament of South Africa.

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