1. common focus, joint action
Infrastructure for
South Africa’s
economic and social growth
Parliamentary Portfolio
Committee on Public Works
Cape Town 19 October 2005
cidb – 2005 Annual Report
construction industry development
Construction Industry Development Board

2. Government policy & legislation
The Construction Industry Development Board is a statutory body appointed by the Minister of Public Works to provide leadership for industry growth, reform and improvement
(CIDB Act 38 of 2000)
Represents a public/ private partnership for delivery and development [PMG note: graphics not included, please

3. cidb team today Ebrahim Moola - Registers Gladness Moorosi – Finance
Nomophoso Mkhonza – Roll-out
Kotli Molise – Communication
Spencer Hodgson - CEO

4. Construction - key to South Africa’s growth strategy
SOUTH AFRICA GFCF as a % of GDP
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
30.0%
1947
1950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
GFCF % GDP
Construction - key to South Africa’s growth strategy
Rise in fixed investment is key to achieving economic growth of 6%
Investment and industry growth evident ( jobs – Stats SA)
Need to double construction output over next decade

5. SA Backlogs - progress Construction 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

6. sustainable industry development
cidb aim
An enabling regulatory and development framework that builds
A total industry delivery capability to achieve South Africa’s economic and social growth
Empowerment of those historically marginalised
Improved industry standards of performance (quality, employment, skills, safety, health)
sustainable industry development

7. Sustainable industry development
Construction Registers Service - Role and Challenges
The Growth Challenge!
SA Construction must double its output over the next decade!
Sustainable industry development
Construction Industry Development Board

8. a call to leadership progress challenges Construction Industry
Indicators
a call to leadership
progress
challenges

9. Our Strategic Challenge Status report – executive conclusion
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
Status report – executive conclusion
Performance

10. Our Strategic Challenge
Double output – 10 years
Empowerment
Growth
convergence in
focus
Capability
Delivery
Performance

11. SOUTH AFRICAN CONSTRUCTION ECONOMY
THE MARKET
SOUTH AFRICAN CONSTRUCTION ECONOMY
SOUTH AFRICA GFCF as a % of GDP
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
28.0%
30.0%
1947
1950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
GFCF % GDP

12. 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
Quality, safety, health and environment, employment

13. Our Strategic Challenge
Empowerment
Growth
enabling
regulatory &
Capability
Delivery
development
environment
impact
Performance
to drive improved value to clients and society!

14. Meeting the challenge Effective and efficient delivery & procurement
Procurement best practice guidelines (CD and website)
Standard for uniformity in construction procurement
Systems for sustainable
industry development

15. Meeting the challenge Effective and efficient delivery & procurement
Toolkit – infrastructure delivery management system for the public sector (supporting tool)
- a basis for IDIP (capacity building) [PMG note: graphics not included, please
Systems for sustainable
industry development

16. A culture of respect for people
Labour based best practice guidelines – resource to stakeholders in job creation goals of Expanded Public Works Programme

17. Meeting the challenge Empowerment Introduction to contracts –
Know your rights, responsibilities and risks (Supporting tool) – empowering SME contractors [PMG note: graphics not included, please
Systems for sustainable
industry development

18. Systematic approach to progressive improvement!
cidb
All about a systems approach to industry development
Facilitate
Systematic approach to progressive improvement!

19. Key role of the Registers
Sustainable delivery and empowerment

20. Meeting the Challenge Construction Registers Service
National Register of Contractors
To drive improving performance of contractors
National Register of Projects
Promote client practices that shape a transforming, healthy and sustainable industry
Roll-out
Through Standard for Procurement Uniformity in Construction

21. Register of Contractors
CIDB Act 38 of 2000…mandates the CIDB to establish the National Register of Contractors:
Facilitates public sector procurement, delivery and risk
Supports contractor development
Promotes better performance - improved quality, safety, health and environment.
to categorise contractors in accordance with their capability:
Purpose

22. 2. Grading Criteria CLASS OF WORKS
General Building
Civil Engineering
Electrical Engineering
Mechanical Engineering
Specialist Works
Background

23. 2. Grading Criteria Tender Value Ranges
Background

24. What the register tells us so far?

25. Distribution/Class of Works
Expect to register 6000 contractors by year end. Useful to note the concentrations in general building and the gaps in other classes of works where greater specialisation and capital resources are necessary.

26. Distribution/Class of Works
Note: At the higher grades numbers reflect registrations in different classes of work eg civils, building, electrical – so at grade 9 there are about 8 contractors registered and a similar number in grade 8
Grade 8 and 9 – Large nationals/ internationals

27. Distribution/Class of Works
1147
Real capacity and significant development potential from grades 2 (classroom blocks) to grade 6 (R10 million) – Also using the PE (potentially emerging) status contractors at a lower grade can be targeted – including grade 1 contractors
Grades 2 – 6, largely provincial & significant black participation

28. Distribution black owned
652
570
88%
Reflects significant transformation achieved to date.
Medium sized contractors = 88% black ownership

29. Distribution youth owned

30. Distribution women owned
The high percentage (about 65% in Limpopo) reflects the impact of preferencing and the fact that at provincial level, competition is largely between black owned enterprises. Therefore preference points for women ownership make a huge competitive difference.

31. Average processing time
When documentation is complete

32. Progress and dealing with unintended consequences
Regulatory Changes

33. Proposed changed to CI Regulations
Replacement of the current Register of Projects with electronic registration which incorporates the system

34. - Register of Projects Linking demand and supply
Client tender adverts – automatically alert tenders
Logging award of tender (or cancellation) - automatically updates contractor’s record
Phase 2 will place best practice requirements on clients

35. Revision of Implementation dates
Client
Previous implementation date
Revised implementation date
Limpopo DPW.
15 Oct 2004
eThekwini
14 Jan 2004
NDPW and all provinces
16 May 2005
15 Aug 2005
30 Aug 2005
Other national departments
30 Sept 2005
Public entities
30 Nov 2005
Metros
15 Mar 2006;
high capacity municipalities
14 Nov 2005
30 Apr 2006
Medium capacity municipalities
30 Jul 2006
Low capacity municipalities
30 Nov 2006
Private sector – Reg of Projs
Revision of Implementation dates

36. Changes to Regulations
Changed – enabling greater access

37. Changes to Regulations
Distinguish at grade 1 those contractors that have track record from those that do not
Improvement to the JV calculator
Clarify – labour-only contractors and those contractors who are issued with the bulk of construction materials are exempt from registration

38. Changes to Regulations
Extending time for the requirements for registered professionals
Criteria for determining an applicant’s contractor grading designation
Track record 2 – 5 years
Financial capability – modify annual turnover and employable capital

39. Greater emphasis on development programmes
Client use of the Register for both delivery & development
Target contracts at different grades
Provide more work for Grade 1
Put in place development programmes for different grades using PE status
Use affirmative procurement – smaller and larger contracts!
Proper use of the Registers by Clients!

40. Registers and Development Programmes
Delivery
Demand side access
Supply side support
Targeted Procurement (APP)
= ACCESS TO WORK
OPPORTUNITIES
Emerging Contractor
Development Programme
= ACCESS TO SUPPORT
Registers support development targeting
information & advice
training & mentoring
finance & credit
Registers support procurement targeting
Client targeting of procurement & development!

41. Registers and Development Programmes
Delivery
Demand side access
Supply side support
Affirmative Procurement (APP)
= ACCESS TO WORK
OPPORTUNITIES
Emerging Contractor
Development Programme
= ACCESS TO SUPPORT
Registers support development targeting
information & advice
training & mentoring
finance & credit
Registers support procurement targeting
Delivery
Empowerment, transformation
Consolidation, emergence
So that contractors emerge into the mainstream!

42. Registers and Development Programmes
EPWP Learnerships
Public Works Incubator Programme
Vukuzakhe, Sakhasonke
Several provinces – using Registers
Nurcha – finance to registered contractors
DTI

43. Challenges ahead

44. Carry forward Seven Strategic Projects
Registers Roll-out (Phase 1)
Toolkit/ IDIP Roll-out
Registers (Phase 2 – Best Practice) - development
Procurement Roll-out & development
CII’s – Expand and Roll-out for impact
Contractor Development – Empowerment
Stakeholder Engagement to support our aims, strategy and projects
Delivery
TO DRIVE
Growth, Delivery, Performance, Empowerment

45. Organisational Challenges
Outreach
Revenue
Compliance issues

46. Joint leadership challenges
Enable capacity building of client procurement and project teams to apply & improve the systems:
Register of contractors
Register of projects
Standard for Uniformity & empowerment models
Use the Registers to develop SA Construction
Appropriate development programmes
Set the standard for a transformed industry!
Enable leadership in all sectors!

47. INFRASTRUCTURE FOR SOUTH AFRICA’S ECONOMIC AND SOCIAL GROWTH
Strategic Outcomes
A total delivery capability
A proudly South African construction industry
An industry that delivers to globally competitive standards
INFRASTRUCTURE FOR SOUTH AFRICA’S ECONOMIC AND SOCIAL GROWTH

48. Thank You Joint Leadership Infrastructure for South Africa’s
economic and social growth
Thank You
Construction Industry Development Board

49. Budget This year – totally committed (no reserve)
Registers revenue to-date approx R2.5 mil
2004/05 – R26 mil (R registers)
2005/06 – R35 mil (R registers)
2006/07 – R41 mil (R registers)
2005/06 and 2006/07 inclusive of VAT!