Western Cape Contractors - Understanding the Construction Mafia!
Prepared by : SAPAC Reporter
Article Classification: Public Awareness
Image courtesy: SAPAC Professionals and Contractors
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Alan Fuchs, the spokesperson on infrastructure development for DA Gauteng, has highlighted the concerning issue of construction mafias in South Africa. These organized crime groups target construction projects throughout the country and employ intimidation tactics to extort a percentage of a company's contract.
Under the guise of "business forums," these mafias approach construction companies that have been awarded government tenders or contracted for private projects. They claim to represent the local community's interests and demand a share in the contract, which may include providing workers for the project and taking a cut of its value.
The situation has led to violent incidents, including assaults and murders. Fuchs estimated that the construction mafias have caused losses of approximately R3 billion in South Africa. Numerous projects have experienced delays, and some construction companies have been compelled to withdraw from their undertakings.
The root of the problem lies in a misinterpretation of the Preferential Procurement Regulations, which dictate that 30% of any project exceeding R50 million must be allocated to "local input." However, this has been mistakenly understood as a requirement to employ individuals solely from the local community where the project is taking place, sparking fierce competition among small businesses and giving rise to the construction mafias.
The mafias, armed and well-organized, approach construction sites and demand a portion of the project's earnings while offering the services of approved business partners, workers, and protection. If contractors refuse to comply, they face threats to their safety and project disruptions. The pervasive nature of these criminal activities has led to multiple projects being affected across the country, causing growing concerns about the impact of construction mafias on the construction industry.