cidb

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cidb

Portfolio Committee (Public Works ) 13 March
2006 Gerard Naidoo
Infrastructure for South Africas economic and
social growth
Construction Industry Development Board
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Our aim

• An enabling regulatory and development
  framework that builds
• A total industry delivery capability to achieve
  South Africas economic and social growth
• Empowerment of those historically marginalised
• Improved industry standards of performance
  (quality, employment, skills, safety, health)

sustainable industry development
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SA Backlogs - progress
Estimates in 1994 Progress by 2004
Housing 1.4 to 3 million units Houses built for the poor 1.6 million
Electricity 60 had no access 70 of households have been electrified
Clean water 16 million with no access Clean water 9 million people got access
Adequate sewerage 22 mil without access 63 of households now have sanitation
70 secondary school enrolment 85 enrolment by 2002
Construction
2004 State of the Nation Address by President
Thabo Mbeki
2005 State of the Nation Address by President
Thabo Mbeki Dep. Pres. ASGISA Minister
Trevor Manuels budget speech
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THE MARKET GROWTH TREND
SOUTH AFRICAN CONSTRUCTION ECONOMY
The need to more than double our output in the
next 10 years !
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CHALLENGES AND OPPORTUNITY !
The construction economy in South Africa is set
for a decade and more of sustained growth driven
by growing investment in Gross Fixed Capital
Formation (GFCF), low inflation and low interest
rates.
There is an urgent need to develop quality
contracting capacity and skills and to elevate
enterprise development in the context of broad
based empowerment and meeting the challenges of
ASGISAs implementation.

• Industry Growth and capacity to deliver
• Empowerment and enterprise sustainability
• Challenges for contractor development
• SMME Development
• Procurement and delivery
• Construction Charter and Scorecard implementation
• Role of the cidb and strategic partners

Construction Industry Development Board
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Our Strategic Challenge
Double output 10 years
Empowerment
Growth
Sustainable enterprises and emergence into
mainstream economy
convergence
in
focus
Capability
Delivery
Skills systems efficiency
Consistent procurement delivery environment
Performance
to drive improved value to clients and society!
Quality, safety, health and environment,
employment
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Converging focus towards Contractor Development
Other development programmes EPWP
Skills
CIDB Enterprise And Contractor Development
Framework
Alternative Technologies and Service Delivery
Models
Material Suppliers
Manufacturing
Construction Industry Development Board
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SOME KEY SUCCESS FACTORS TO ACHIEVE ENTERPRISE
DEVELOPMENT

• Finances
• Continuity of profitable work
• Effective practices (roles and procurement) of
• - Clients
• - Built Environment Professionals
• Skilled Contractors and Labour
• Materials (Economics)

Construction Industry Development Board
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Key Challenges

• Inability of small contractors to engage skills
  and inability by industry to project the skills
  demand
• Inability to monitor empowerment
• Lack of a comprehensive approach to contractor
  development
• Inability to target procurement and development
  strategies at different contractor categories.

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Key Challenges (continued)

• Continuous inflow of new entrants undermining
  sustainability of contractors
• A misconception that construction and enterprise
  development equate to job creation
• Closing the first and second economy gap
• Inconsistent procurement and delivery practices
  by clients and that impede sustainable contractor
  development
• The failure of current procurement practices

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Our Strategic Challenge
The ability of the construction industry to
deliver will affect job creation in all sectors
and feed directly into the goals of ASGISA
Empowerment
Growth
A key development constraint lies in the
dispersed nature of the industry and its clients
cidb has developed a range of instruments
programmes that will drive convergence in
development focus
Capability
Delivery
Performance
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Contractor development as key to the cidb Mandate
ENABLERS
South Africas construction output will need to
double in less than 10 years !!!
development through partnership
Construction Industry Development Board
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Possible stakeholder linkages for sustainable
impact
Construction Industry Development Board
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Proposed Construction Sector Interventions
(Short-Medium Term)

• Expand NDPW incubator programme in collaboration
  with provincial public works, ensuring that all
  contractors are registered
• Promote next round of EPWP learnerships (grades 1
  and 2) and ensure that all contractors are
  registered
• Establish key lessons from existing development
  programs (eg. ECDP-CIP, Vukuzakhe, etc.)
• Identify suitable willing and able clients and
  enter into partnership agreements for
  implementation

Construction Industry Development Board
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- Manual for road construction (to all
contractors) - Contractor Development (by
targeting through registers) - Procurement
reform and sustainable Standard for uniformity
in construction procurement
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ASGISA

• ACCELERATED GROWTH
• GEARING FOR DELIVERY
• JOB CREATION
• EMPLOYMENT
• SKILLS

Accelerated and Shared Growth Strategy
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CIDB ROLE IN ASGISA IMPLEMENTATION

• Public Sector client capacity (Under-expenditure)
• CIDB Role
• Toolkit Delivery Management System and IDIP
• Centres of Excellence and Outreach
• Capacity building to promote best practice
  (Roll-out Progressing)

• Industry skills shortage
• CIDB Role
• Study of skills shortage in the industry
• Development of a industry skills development plan
  (JIPSA ESDA)
• Promote framework for contractor development

• Maximise the potential of the EPWP and other
  initiatives to create jobs
• CIDB Role
• Promote the labour based technologies
• Infrastructure Delivery Management System
• Promote best practice in labour intensive method

Accelerated and Shared Growth Strategy
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PROPOSED ASGISA INTERVENTIONS
1) Public sector procurement reform delivery
Management2) Maintenance of existing and
proposed Infrastructure (National Business
Plan/ Framework Labour intensive)3) Skills
development Skills Audit based on large
projects Projections on capacity and
requirements Dept. of Education tertiary
institutes Construction Week CETA/ DTI / DPE
artisan training DPW (JIPSA Employment
Skills Development Agency - ESDA )4) Contractor
development cidb registers empowerment and
SME growth, EPWP learnerships and ECDPs, DTI
INDUSTRIAL STRATEGY - CONSTRUCTION SECTOR
_DTI-SEDAs ICT, cidb Industry
performance.5) Materials supply and
manufacturing Local/ abroad - Material
manufacturing and pricing, 6) Research and
academic excellence
Accelerated and Shared Growth Strategy
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cidb

• All about a systems approach to industry
  development
• To achieve double our output over next 10 years
  we cannot function business as usual
  Alternative delivery methods and Innovation
  needed by all !

Systematic approach to progressive improvement!
IMPORTANCE OF SYSTEMS?
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IMPORTANCE OF SYSTEMS?
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Construction Registers Service and their role in
meeting the challenges

• National Register of Contractors
• To drive improving performance of contractors
• National Register of Projects ( I-Tender)
• Promote client practices that shape a
  transforming, healthy and sustainable industry
• Roll-out
• Through Standard for Procurement Uniformity in
  Construction
• Future Register of Professional Service
  Providers Material suppliers
• Registers are the bridge between the 1st and 2nd
  economy
• Registers are the grounding for long term
  sustainable employment
• Our contractors are on the EPWP learnership
  programme and being monitored
• Incubator Dev Prog. is being provincially rolled
  out

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Class of Works by grading
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- Register of Projects Linking demand and
supply

• Client tender adverts automatically alerts
  tenderers (public sector clients)
• Logging award of tender (or cancellation)
  automatically updates contractors record (public
  and private sector clients eg. ICCF)
• Information on projects nationally

Fully automatic website operation creates
transparency
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Breakdown by Class of Works
CLASS OF WORKS No VALUE  AVERAGE BY TOTAL

CE 29 R 5, 263, 206, 295.27 R 181, 489, 872.25 79.24
EE 9 R 158, 439, 459.63 R 17, 604, 384.40 2.38
GB 53 R 407, 911, 947.30 R 7, 696, 451.84 6.14
ME 23 R 810, 150, 899.32 R 35, 223, 952.14 12.19
SN 2 R 1, 090, 083.96 R 545, 041.98 0.01
SO 1 R 849, 063.33 R 849, 063.33 0.01
Grand Total 117 R 6, 641, 647, 748.81    
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Key conclusions from registers

• Registers living tool, continuous learning
  significant adjustments made
• Registration within 21 days (14)
• 8500 contractors registered
• Bulk of work done by black contractors
  (significant youth and women)
• Contractors get continuous work able to
  consolidate and grow
• Can identify capacity gaps focus development
  programmes for growth, capacity performance
  targeting development

Role of clients is key to delivery development!
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Challenges

• Public sector client capacity
• Sustainable Development of historically
  disadvantaged enterprises
• Inability to monitor development of contractors
• Lack of comprehensive approach to contractor
  development
• Inability to target development strategies at
  different contractor categories
• In consistent procurement and delivery practices
  by clients that impede sustainable contractor
  development
• Inadequate research and knowledge

The CIDB commits to addressing the constraints
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CIDB role (contribution)

• Public Sector Delivery Capacity
• CIDB Role
• - Toolkit Delivery Management System and
  IDIP
• - Centres of Excellence
• - Capacity building to promote best practice
• - Best Practice Guidelines for labour based
  construction

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CIDB Role (contribution)

• Sustainable Contractor Development
• Development of 3Rs Best Practice Guide
  Contracts Know your rights, responsibilities
  risks
• a concept programme for enterprise development of
  registered contractors
• Development of information and knowledge tools
  for contractors, clients and development
  institutions e. JBCC and GCC training materials
  and project IMS
• Establishment of outreach centres based on
  partnerships
• Harnessing the power of the RoC for monitoring
• Targeting specific contractors using the RoC
• Refinement and support to existing contractor
  development programmes e.g. Contractor Incubator
  programme
• Best practice contractor recognition scheme

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CIDB role

• Knowledge and research
• National research agenda
• Body/ Network of Knowledge
• Library of construction procurement best practice
• Professional Skills
• - Procurement and delivery
• - Industry development issues

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CIDB role

• Inconsistent procurement and delivery practices
• Roll-out of the Standard for uniformity in
  Construction Procurement
• Toolkit delivery management system

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IMPLICATIONS
- Need to double output over next 10 years-
Coming out of history of declining investment-
Need for infra-structure investment focus with
maintenance- Streamlined procurement processes
required (RoC, RoP, IDIP,etc )
- Public Sector reform (IDIP toolkit and
guidelines)- Skills study and strategies
(Promote support workforce skills dev)-
Maintenance strategy- Outreach centres based on
partnership- cidb registers targeted Enterprise
Development
cidb CONTINUED WAY FORWARD
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Strategic Leadershiptowards sustainable job
creation

• A total delivery capability
• A proudly South African construction industry
• An industry that delivers to global standards

Thank You
INFRASTRUCTURE DELIVERY FOR SOUTH AFRICAS
ECONOMIC AND SOCIAL GROWTH