Construction companies are concerned about how the state will be able to fund its latest infrastructure drive.
Wolfgang Neff, the CEO of Wilson Bayly Holmes-Ovcon (WBHO) said this week after the company released its financial results for the six months to December, that long-awaited, large-scale infrastructure projects were finally being rolled out again in SA, after years of waiting. However, his big question was where the money would come from.
He said it was clear that under President Cyril Ramaphosa, there had been a drive to spend on infrastructure, and that state-owned enterprises (SOEs) had been releasing projects for tender from road building to student accommodation and everything in between.
“We are seeing a sudden rise in tender activity. The biggest question though is how SOEs and other bodies will pay for it while they tackle existing challenges around Eskom, SAA and so forth,” Neff said.
WBHO had reported a steady order book of R36bn, which was largely unchanged from the one reported in June 2020, but showed orders from SA grew as much as 14% — the quickest rate compared with regions in the rest of Africa and Australia.
This is while its UK operations suffered a 23% drop. The hard lockdown imposed in the UK towards the end of 2020 scuppered WBHO’s project growth in the region.
Wikus Lategan, CEO of Calgro M3, an affordable housing and memorial parks developer, echoed Neff’s sentiments on Wednesday in an interview with Business Day.
“We have mostly avoided government projects because of concerns around funding and timing. It’s taken three years for the SOEs to work out what projects they need and yes we will see new tenders now. But we couldn’t commit to projects while there were so many delays, which would add risk to our business,” he said.
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