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SPEECH ADDRESS BY MEC JACOB MAMABOLO ON BEHALF OF THE PREMIER OF GAUTENG, DAVID MAKHURA, AT THE FIFTH CONSTRUCTION MANAGEMENT SUMMIT HOSTED BY THE SOUTH AFRICAN COUNCIL OF THE PROJECT AND CONSTRUCTION MANAGEMENT PROFESSIONS; UNIVERSITY OF JOHANNESBURG 28 June 2016 Programme Director The President of the South African Council of the Project and Construction Management Professions, Mr Manchidi and your leadership collective Professor Sinha, the Executive Dean of the Faculty of Engineering and Built Environment at UJ Leaders and representatives of business Officials from government Delegates to the Summit Ladies and Gentlemen; Thank you for affording us the opportunity to address this important gathering of practitioners and stakeholders in the Construction Industry and the Construction Management discipline. Gathered here are men and women who carry the enormous responsibility to drive the growth, transformation, sustainability and global competitiveness of our construction industry. Allow me to take this opportunity to convey the sincere apology of the Premier of Gauteng, David Makhura, who could not join us on this occasion due to other pressing work commitments. I however bring with me Premier Makhura’s best wishes to this Summit. We will follow closely deliberations at this Summit and we look forward to its outcome. I am humbled, therefore, on behalf of the Premier and the government of Gauteng to welcome all the delegates to this Summit. I welcome you to the Gauteng City Region, South Africa’s economic engine contributing 35% to total GDP; 8 to 10% to Africa’s GDP; 40% to national employment; 42% to total industrial output; 63% to national exports; a leading subnational destination for Foreign Direct Investment into Africa and a home to 45% of all SMMEs in the country. As stakeholders and practitioners in the construction industry, I wish to draw your attention to the fact that we in the Gauteng City Region value the contribution made by your industry into our economy. Gauteng is the home of the construction industry! This is particularly the case since in accounted for 43%, amounting to R construction industry’s total output. In, in our province there is evidence that massive and growing construction site. 2013 Gauteng alone 169.6 billion, of the addition every-where Gauteng is indeed a In the words of Premier David Makhura when he delivered the State of the Province Address early this year; “Let the cranes continue to go up everywhere in the province. Let the construction work intensify!” Accordingly and in line with our New Economic Plan for the Gauteng City Region, which we will unveil next month, the Construction and Real Estate industry is one of the industries, sectors and subsectors that we will continue to privilege as part of our on-going efforts to reignite our economy, placing it on a sustainable and inclusive growth path as well as to advance economic transformation, empowerment, innovation and invention. It is to us a matter of serious concern that the construction industry’s contribution to the economy of the Gauteng City Region is currently on the decline. For instance the growth in the construction sector’s Goss Value Added declined substantially from a peak of 2.6% in 2013 to an estimated 1.3% in 2015. We are also deeply concerned by indications that in the first quarter of 2016, Gauteng lost a significant number of jobs in, among others, the construction industry. In that period we lost a total of more than 195 000 jobs, with construction jobs being among the major casualties. We are alive to the reality that the construction industry is currently in a phase of low growth and employment in its business cycle. We are however optimistic about the industry’s prospects. We are also confident that gatherings of this nature will strengthen on-going efforts to turn around the fortunes of this industry. We are thus encouraged that this Summit will spend time deliberating, exchanging ideas, sharing experiences and best practise, as well as formulating proposals to address challenges facing the industry including transformation, project delays and cost overruns, the skills challenge, the economic, social and environmental sustainability of projects as well as the need to build an ethical, professional industry anchored by a culture of high performance. Programme Director, we wish to caution this Summit not to succumb to the temptation to use the current weak state of the construction industry as an excuse to reverse the gains made thus far in effecting transformational change in the industry, as part of normalising our country’s economic landscape. To us, transformation is a non-negotiable! To us nothing is as urgent as the need to push ahead, more vigorously, with radical social and economic transformation. This must include responding to the disparity in skills between the various sectors of our society, which continues to condemn many of our people to the margins of our economy. Indeed nothing short of a skills revolution will help us address some of the skills challenges we face as a country! This Summit must also help the construction industry to continue implementing projects in a manner that is environmentally sustainable. This is particularly important to us in Gauteng given our determination to pursue a growth that that is smart, green and ecologically sustainable. We pride ourselves that it now takes us 90 days to finalise Environmental Impact Assessments (EIA’s). This is the shortest time it takes in the country. Our goal, going forward, is to process EIA’s within 30 days. We believe by doing this we are reducing the cost and ensuring ease of doing business in particular for firms in the construction and related industries. We are also positioning ourselves as a competitive investment destination for these companies, both locally and internationally. We look up to this Summit to help us strengthen efforts towards our collective goal of delivering construction projects on time and within budget. This is major challenge that we in government are continuing to deal with on a daily basis. We need the private sector to come on board, so that together we can eliminate this scourge. Issues of professionalism, quality and ethical conduct need our continuous attention, for it is only when the industry’s credibility is beyond reproach that the levels of trust and partnerships with the industry can thrive. Once again we look up to this Summit to provide further guidance in this regard. Programme Director, despite the challenges currently facing the construction industry, in Gauteng cranes are up and construction is underway on major projects as we, together with the private sector, build new post-apartheid mega cities and human settlements in places such as Savannah City, Sandton City, Steyn City, Waterfall City, Tshwane West Capital, and Africa Gateway in Centurion. In addition, initial work regarding the development of the new Lanseria Airport City and Vaal River City has started. As the provincial government we are also spending more R 7.2 billion to upgrade our major roads network, in order to improve mobility and ensure integration of all our development corridors. In total as the provincial government we will, over the next there years, spend R 32 billion on developing our infrastructure focusing on improving our energy security, Information and Communications Technologies, improving public transport and ensuring water and sanitation security. Equally, our municipalities, especially our Metro’s – the City of Joburg, the City of Ekurhuleni and the City of Thswane – will spend in excess of R 32 billion on infrastructure development over the next four years. We estimate that, over the next 10 to 15 years, we will require in excess of R 1.6 trillion to provide for all our social and economic infrastructure requirements. In this regard we are working with the private sector to implement a 15-year Infrastructure Development Master Plan which we launched early this month. I am mentioning all of these things to indicate, once again, that Gauteng is one massive construction site and will remain so for some time to come. Programme Director, due to our strategic location, our state of the art, world class social and economic infrastructure as well as many other comparative and competitive advantages inherent in our City Region, Gauteng is Gateway to the African Continent. It is for this reason that many firms, including those pursuing opportunities to the north of our borders, choose to locate in Gauteng. Currently many large and small as well foreign and local companies are headquartered in Gauteng. In addition as Gauteng we have taken a conscious decision, as part of our overall commitment to transforming, modernising and re-industrializing our economy, to take a lead in Africa’s new industrial revolution. This means we are deliberate in our efforts to create opportunities for Gauteng based companies to take part in the major value and supply chain, especially within the SADC region. We want Gauteng based companies to be among the major drivers of the Africa rise narrative. I am raising all of this to highlight a major opportunity that those in the construction and related industries can take advantage of. According to Ernst & Young’s 2014 Africa Attractiveness Survey, the cost of addressing Africa’s “infrastructure deficit” is estimated to be approximately US$ 90 billion every year for the next decade. In addition, it is estimated that in 2013 alone, there were 339 mining projects at various stages of development across SADC. This presents massive opportunities for companies in the mining, construction and related industries. We are prepared to work with Gauteng based companies as they seek to access these and many other opportunities on the Continent. As I conclude, let me reiterate our message to this Summit. Our message is that the Gauteng City Region is the home of the construction industry; Gauteng is open for business and as government we are ready to work with the industry to address its challenges and unlock its full potential as a significant contributor to economic growth and employment. I wish you a successful Summit Thank you.