But industry believes a state company is not the way to respond. Problems that have led to shoddy construction of houses include the way tenders are awarded, the type of materials used, supervision (or the lack of it) and lack of skills.
Consulting Engineers SA (Cesa) president Naren Bhojaram says the state's budget for subsidised housing does not allow for adequate construction supervision by experienced people. "Hence contractors take a chance and get away with poor workmanship."
Cesa has been vociferous in its opposition to the idea of a state company. Along with other industry bodies and companies, it has been asked by the human settlements department to prepare responses to Sexwale's proposal.
Bhojaram believes the department should create a platform for the private sector to excel, rather than setting up structures in competition with it.
But one cannot always blame government, says Master Builders SA executive director Tumi Dlamini The symptoms of the problem - lack of training and project management capabilities - cut across the department of human settlements and the private sector.
These symptoms should be attended to rather than creating a new entity, she adds. But she also says state-owned companies have been a success in places like Brazil and China, and a proper study needs to be undertaken to assess whether it can work here.
She echoes the call for better monitoring and evaluation by the state.
The deterioration of relatively newly built homes has had a big impact on housing beneficiaries. The public protector's office has received 2 305 complaints about badly built RDP houses from residents of the North West alone.
The department's objective has been to empower small-scale builders rather than large contractors. Creating jobs through the construction of new homes has been its key strategy.
Small- and medium-sized companies have worked with Nurcha, a housing construction financier, to provide bridging finance as well as administrative and training support. The National Home Builders' Registration Council looks after quality. All home-builders are required to register their business with the council.
But this system's ability to assure quality has failed dismally.
Dlamini says companies are sometimes awarded a tender despite failing to meet the Construction Industry Development Board's grading, which limits the size of the project that a company can tender for, based on its own size and capability. The basis for these appointments is questionable.
Some of the criticism has been directed at the quality of building materials.
But at a recent briefing, acting chief executive and general manager of the National Regulator for Compulsory Standards, Thomas Madzivhe said poor construction of RDP and other low-cost homes was not the result of low-quality cement. His comments were in the context of criticism over the quality of imported cement from Pakistan. Investigations showed imported cement met the regulator's standards, he said.
Sexwale's proposal is still short on detail. The department says it won't necessarily mean that government would control 100% of the company. Its management could remain with the private sector.
Addressing construction companies earlier this month, Sexwale said: "I cannot continue giving money to people whose sole mission is to undermine the work of government. We want to see you succeeding, creating wealth, and we want to see you being profitable."
Sexwale himself has identified that the "crooking" of the tender system has often awarded contracts to undeserving companies.
He says large companies, together with their black empowerment partners, should build some of the houses. But empowerment must not be synonymous with shoddy workmanship, as in the past.
Sexwale wants credible companies who pay attention to detail, have the right skills and provide quality products.
However, this should not result in work being taken away from emerging contractors altogether. Mentorship programmes facilitated by large firms for emerging contractors are a necessary part of the process, Dlamini says.
The solution is not a state-owned construction company, according to Bhojaram. "We need better procurement of the service providers, proper budgets to do adequate construction supervision, and a realisation by government that large-scale construction of what may seem to be simple buildings requires proper project management," he says.
Problems that government can fix include ensuring that experienced technical staff manage infrastructure projects; rooting out corruption; resolving problems in procurement; and inviting the private sector to come up with innovative ideas.
Moreover, he says contracts awarded to inexperienced contractors, some of whom are politically connected, have tarnished the process and affected the final product. Cesa recommends that government carefully check the ownership structures of contractors to ensure that the family members of politicians are not its beneficiaries.
The industry is expected to meet Sexwale in September, armed with their response to his proposal.
Source: Financial Mail
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