“KEYS FOR CONSTRUCTION VALUE ADD IN DRIVING GROWTH” CONSTRUCTION AND ENGINEERING MANAGEMENT Panel Discussion on “KEYS FOR CONSTRUCTION VALUE ADD IN DRIVING GROWTH” Presented by Thabo Masombuka (Mr) Chief Executive Officer (CSCC) 03 July 2017

Brief Introductory Agenda 1 About Thabo Masombuka 2 About the CSCC 3 The relevance & importance of CONSTRUCTION 4 The image AND Perceptions 5 Transformation TRENDS in the industry 6 Is the future certain ??

1 About Thabo Masombuka A self-starter with a great sense of urgency, born and raised in Middelburg, Mpumalanga Province, where he completed his High School with a Matriculation exemption in 1993. In 1996, he enrolled for his B.Proc Law degree with the University of the Western Cape (UWC) and graduated with an LLB Degree (Converted) in the year 2000. At University, he majored in Commercial Contracts, Constitutional, Criminal & Civil Procedure, Public & Private International Law and Law of Evidence. Between 2008 and 2011, he served as the Director for BBBEE Partnerships and Sector Charters at the Department of Trade and Industry (The dti). Under his stewardship and guardianship, various sector charters were gazetted in terms of the BBBEE Act.

1 About Thabo Masombuka Thabo is currently works as the Chief Executive Officer (CEO) of the Construction Sector Charter Council (CSCC), an industry executive body responsible for overseeing and monitoring the implementation of transformation in the construction sector. He was instrumental in setting up the CSCC to position it as the executive authority for empowerment and transformation in the industry. Thabo also serves as the Non-Executive Chairperson of the King Hintsa TVET College Council in the Eastern Cape and is responsible for overall governance and oversight of the Technical, Vocational & Educational Training institution.

About the CSCC The CSCC is the EXECUTIVE AUTHORITY charged with : Entrusted with OVERSEEING and MONITORING the IMPLEMENTATION of the Construction Sector Codes (CSC) of Good Practice by the Industry. Through industry programmes, FACILITATE the achievements of sector empowerment TARGETS. Sharing information with members of the Construction Industry, appropriate Ministries and SOEs, Verification Agencies, CIDB, etc Provide necessary GUIDANCE & BEST PRACTICE NOTES on the interpretation of the principles of the Construction Sector Code. LIAISON with and reporting to the regulatory stakeholders on the annual measurement of the construction sector code - BBBEE Advisory, DPW and the DTI . Creation of RELIABLE and ACCURATE industry specific empowerment data.

Why the CONSTRUCTION Industry As a General Principle, infrastructure constitute cornerstone and backbone of economic development and growth. It is an underlying propeller and trigger for economic investment and improvement. Road Infrastructure, Rail & ICT network are key elements of an infrastructure portfolio. Construction is an important sector that contributes greatly in the economic growth of a nation. ... Government contracts with Construction Industry to develop infrastructure related to health, transport as well as education sector. According to the PWC construction 4th edition – As the biggest contributor to employment, has taken a decline & reduction of the market capitalization

Image & Perception The Competition Commission Investigations – 2010 Stadium Collusion & Cartels Fatalities & Safety failures A few incidents, a few TOO MANY Skills shortage & lack of standards Corruption and public sector procurement Lack of opportunities & sustainability Non-profitability

THE BUSINESS CASE FOR TRANSFORMATION

THE BUSINESS CASE FOR TRANSFORMATION

BLACK OWNERSHIP – EXCLUSIONS PRINCIPLES EXCLUSION OF EQUITY EQUIVALENT PROGRAMMES IN THE CONSTRUCTION SECTOR Initially, the EEPs were excluded in the Draft Construction Sector Code – After the Public Commentary period in December 2016. However, following some OBJECTIONS and LOBBYING, a compromise provision was made. Although Equity Equivalent Programmes (EEPs) are recognised in line with the provisions of statement 103 of the Generic CoGP,  the CSCC will, together with the DTI, in consultation with the relevant forums representing multi-national enterprises, investigate the acceptability and effectiveness of these in the construction sector. Read with the provisions of clause 1.5.6, the CSCC and the DTI will, within 12 months of the Amended Construction Sector code being gazetted, issue a PRACTICE NOTE to clarify the application of the EEP. Confirmation that multinationals were consulted on this one since it is only introduced after the Section 9 (5) gazette.

TRULLY BROAD-BASED

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