1. Construction Industry Charter Progress Update
Prepared for: Portfolio Committee
Prepared by: Lydia Bici
Date: 17 November 2004

2. Recap Procedural issues Launch of the charter 04 0ctober 2004
Integrated Management Committee
Technical teams
Role of government
Launch of the charter 04 0ctober 2004

3. Construction Transformation Charter (1)
1. Process Issues
Charter process launched by Minister on 4 October 2004
All technical committees operational
Integrated Management Committee comprising of all stakeholders manages the process
Work plan for the Charter process developed
Anticipating Charter to be submitted to DTI for approval at end of July 2005

4. Construction Transformation Charter (2)
2. Technical Committees (TTs) Feedback
All TTs operational
TTs work to be complete by December 2004
Corporate Social Investment (CSI) TT
Definition of CSI has been reviewed and reworked. The
working definition incorporates projects that are aimed
primarily at black groups, communities and individuals that
contribute towards transformation and have a strong developmental approach.

5. Construction Transformation Charter (3)
Corporate Social Investment (CSI) TT (cont)
Further discussions necessary irt:
Whether CSI projects should be targeted to CI or to the society as a whole
Possibility of premium scoring or bonus points in the CI
Costing time and skills put into dev projects
Exemptions of certain companies from CSI
Approval of CSI projects

6. Construction Transformation Charter (4)
Ownership and Control TT
The definition and application of ownership was reviewed and redefined to apply to South African operations of enterprises operating in the construction sector.
Other issues for discussion included:
Whether a subsidiary could count control at a group level
Acquiring equity on a conditional, deferred basis shall not be counted as direct ownership until equity is actually transfered
Whether the Charter should prescribe where companies should implement BEE ownership

7. Construction Transformation Charter (5)
Procurement
Definitions
Basic definition accepted as “ all expenditure for goods and services including capital expenditure, excluding: expenditure classes covered elsewhere in the charter (salaries, wages, csi), all VAT payable, goods which cannot be sources locally or goods specified by client”

8. Construction Transformation Charter (6)
Procurement (cont)
Definitions
Proposed that premium scoring be applied on spend on black women women-owned companies, black owned companies or companies rated A
Spend on black empowered companies and companies rated B
Spend on black owned labour only contractors at 50% of actual spend
Capital expenditure to be counted at the time of placing the order and not amortised over the lifespan of the asset.

9. Construction Transformation Charter (7)
Human Resources
The TT has worked on definitions, reviewed challenges as they related to HRD in the CI and made recommendations
Interventions:
Mentoring of black people and designated groups
Development of the youth through learnerships and apprenticeships, bursaries
Increase direct training costs spent on training
Compliant with the legal requirements
Increase level of black representation within management

10. Construction Transformation Charter (8)
3. Process forward
TTs’ outputs to be further refined and planned for completion by December 04
IMC to have a workshop on 25/26 Nov 04
An Indaba with all stakeholders planned for early next year
Provincial briefings planned for beginning of February 05
1st draft of Charter by end December 04