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South Africa considers state-owned construction company – Business Leaders

August 7, 2012 No Comments »

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The South African government is being ‘forced’ to consider implementing a state-owned construction company, according to the Human Settlements Minister Tokyo Sexwale.

Sexwale claims the South African government has paid out around R50 billion for the rectification of shoddy workmanship on low-cost housing, which is ‘forcing the government’s hand’ to consider establishing a government-regulated company.


The minister invited dozens of construction companies to a breakfast in Pretoria, where he fielded questions from delegates. According to iAfrica, Sexwale said: “We cannot go on like this, so we decided to bring the industry to one place to ask them how we can shape up. It is all about quality.”

Sexwale claimed the meeting was designed to hear input on the feasibility of a state-owned company in addition to engaging with the private sector.

Contractors at the event highlighted the main issues affecting construction in the country, blaming poor oversight and inadequate controls.

“I’m calling for a debate on the issue,” Sexwale told news site iol: “It’s an open-ended agenda. I cannot continue to do this job knowing that the figure of R50bn will escalate and you have to go back to the same people to do the rectification.

The minister confirmed that a government team had been to Brazil, which has a state-owned construction firm, along with other parts of the world to see how state-owned construction companies worked.

When he spoke about the issue in parliament, Sexwale stressed that the government need not have a 100 percent stake in the company.

“It could be 50 percent or 20 percent. I’m not going to trust anybody in my office to run such a company. But I haven’t taken a decision to do that. All I have said is that we have a R50bn problem. Let’s have a debate and hear the arguments.”

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