Well before the great COVID-19 leveler, the South African property development and construction industry already faced enormous challenges from which it has yet to recover. Among these, decades of rising material costs, declining private investment against growing interest rates, standstills in policy making and procurement, and the construction mafia. These have all significantly eroded labour opportunities, seen an exodus of professional skills abroad, and many company doors closing including those of giants among our industry.
However, over the past few years, a new challenge has arisen and comes on the back of BRICS; that which is purported to be the South African savior against everything from infrastructure development to tariffs from the USA.
“As the Western Cape Property Development Forum (WCPDF), which represents the full production line of property in our Province, we feel compelled to ask President Cyril Ramaphosa: will the South African construction industry be the sacrificial lamb to multi-billion rand infrastructure investments from abroad, particularly those being initiated by SANRAL?” asks WCPDF chairperson, Deon van Zyl.
“An emerging trend for several years has seen major construction deals (along with those in other industries) being signed with China as part of BRICS. We do not dispute that these are massively important to the South African economy and, with the decline of our own construction industry, admittedly there are few players left with the capacity to undertake such large-scale projects.”
But significant red flags are increasingly being raised with the compilation of SANRAL tenders and the decision making and methodology used in their awarding. Among these have been the Ashburton Interchange in KZN, and the Mtentu Bridge in the Eastern Cape, with both contracts ultimately granted to Chinese companies that had been disqualified earlier on in the bidding process.
The most recent concerns surround the R6.5bn tender in the Western Cape for the upgrade of the Huguenot Tunnel on the N1.
The South African Forum of Civil Engineering Contractors (SAFCEC), a WCPDF association member, raised its concerns directly with SANRAL in December 2024, when the tender was first advertised only one week before the industry’s 15 December end-of-year recess, and calling for the compulsory on-site clarification meeting to be held the day after. The tender was due to close in February.
While SAFCEC’s interaction saw the clarification date being extended to 16 January (for a virtual information session) and 30 January for the compulsory on-site inspection, the tender date was only extended initially only to 7 March. As noted by SAFCEC, regarding the complexity of the project, the revised submission date for tenderers to compile their submissions remained hopelessly inadequate, specifically given the plethora of questions emerging from the industry, and a total of 18 addendums each transforming the scope of the multi-specialisation project.
Van Zyl further asks: “From this, would one be unreasonable to speculate – was the tender as initially compiled and deadlined intended for an already targeted company abroad? Whose consultants and labour would they be using?
“Granted, Minister Dean Macpherson vowed a year ago to turn South Africa into a construction site and create thousands of jobs. But how much will South Africans professionals and more critically labour truly benefit from these sites at the end of the day?”
The numerous addendums finally resulted in the tender date being reset first for June, closing ultimately on 18 July. But two further concerns raised by SAFCEC are pertinent to the tender as a whole.
On the one hand, while much of the mandatory and functional criteria contained in the tender document was exceptionally strict and would appear to, by its very nature, exclude the majority of South African contractors, adherence around Construction Industry Development Board (CIDB) compliance and, in turn, with the Bargaining Council of the Civil Engineering Industry (BCCEI) were not deemed to be compulsory before tender submission.
These are both non-negotiable for any South African contractor who would be legally obligated to be registered with CIBD before submission on any SANRAL tender. However, all that was required on the Huguenot Tunnel tender was a requirement to be “… capable of being registered prior to the evaluation of submissions …”.
One must return to the question of opportunities for South Africans: in June 2025, the National Union of Mineworkers (NUM) raised concerns around Chinese construction companies classifying themselves as South African companies when competing for largescale tenders, and bringing not only their professionals but labour from abroad.
Mpho Phakedi, NUM secretary-general noted at the time: “We are concerned that in the civil engineering sector there is an emerging trend of Chinese construction companies … even [being] graded by the Construction Industry Development Board as South African companies. They are not classified as foreign companies …”.
Following the mining sector which represented 76% of NUM’s membership, its second largest membership lies in construction at 11% of its membership.
Likewise, it is of interest that, following the recent 17th BRICS Summit held in July in Brazil, South Africa undertook to fast-track visa applications for “critical skills workers”, with a mandate to real-time escalation channels for work visas tied to projects over R50 million.
Adds Van Zyl: “While it was noted during this summit that these would be for investors and, for instance, highly skilled engineers, who else will be fast-tracked?
Returning to the Huguenot Tunnel, the upgrade was originally included in the Winelands Toll Project scope of works over a decade ago, with a number of South African companies having bid on the project then. Unfortunately, the project did not materialise; however, the skills clearly existed then to perform, among many other aspects of the project, the tunnel lining, ventilation and lighting.
Concludes Van Zyl: “It could also be argued that South Africa has some of the deepest mines in the world and the execution of Huguenot Tunnel lining would be familiar to our local mining engineers.
“Right now, in the Western Cape, the big question on the local industry’s mind and one that we pose in turn to the politicians, among them national Ministers Macpherson, Cressy and indeed our Provincial Premier Winde and Minister Tertius Simmers, is to what extent will our own professionals be employed on the Huguenot Tunnel contract … and how much will be South African labour?”
About the Western Cape Property Development Forum (WCPDF)
Founded in 2008, the Western Cape Property Development Forum (WCPDF) is a registered non-profit, membership-based organisation (246-760 NPO).
OUR VISION is to create awareness, address the challenges that face the property development and construction industry and to be the collective voice of that industry in the Western Cape. We focus on the full production line of private and public property projects and associated infrastructure provision.
OUR MISSION is to actively engage and lobby politicians and government representatives and provide detailed input, guidance and feedback on draft legislation and policy. We make the public sector aware of the ramifications that decision-making processes and service delivery have on property development and construction and, in turn, the economy and most importantly jobs. And while the industry is always impacted by national legislation, the most critical development issues tend to occur at ground level, and therefore our emphasis is regional. Property is produced at municipal level.
Our key focus areas:
- To be a representative body for the property development and construction industry in the Western Cape that is recognised by relevant authorities, especially in terms of the vital role that the industry plays in the province’s economy through investment and job creation.
- To promote the interests of the property development and construction industry.
- To interpret and facilitate understanding between the authorities and the industry.
- To inform our membership of changes in legislation and policies.
- To create a public profile and understanding of our industry towards making the greater Western Cape sensitive to the need for property development.
- To actively engage in the education and transformation of our industry.
