Sanral chief executive Skhumbuzo Macozoma said this was a culmination of an engagement process started last year to pursue common objectives and contribute to the transformation of the local construction industry.
“Sanral, under its Horizon 2030 plan, developed a strategy that sought to intervene in the market, making sure that the supply chains we have for material, equipment and other products in the construction industry begin to serve middle and small black contractors,” said Macozoma.
The chief executive said equipment supply in particular was a real challenge as the contractors would get tenders but were without equipment to execute the projects as they relied on big business supply coming at a premium.
“We decided to talk to the original equipment manufacturers to come up with a strategy to make equipment available to our contractors when they execute on our projects. This MoU will help us achieve that.”
Macozoma said while a lot of small and medium construction companies were owned by black people, most faced the common challenges of access to markets barriers such as access to capital needed to acquire equipment.
He said they struggled with collateral when they approached banks for financing. “The matter of a track record, as we are trying to promote creation of new black businesses that will participate and compete in the market, was also an issue. When they do not have the experience, they have a challenge to convince lenders to acquire equipment.”
The MoU would then allow that when they get the equipment and still needed support when the equipment gave them problems they would have technical teams that could assist them.
The entity said they wanted to be able to train people so that they understood the equipment they were buying and owning to be able to get the most mileage out of it.
Macozoma said this programme would solve, among other things, the problem where contractors were supposed to subcontract local businesses.
Macozoma said losses due to project disruptions could be anything depending on how far the projects had gone and their quantum. He said there were times when they ended up overspending on projects.
Bell equipment said it would use its significant infrastructure of 26 branches throughout the country to provide technical support and help with their strategic partnerships, with banks going a long way to secure finance following Sanral’s commitment to deal with stumbling blocks in getting projects off the ground.
- BUSINESS REPORT