In October 2013, SAFCEC, the seven participating listed Construction Companies and the Black Business Council in the Built Environment (BBCBE) met
to find a way to:
- restore the relationship and build trust with Government,
- make the Industry more inclusive of black people, and
- ensure SA’s very competitive and effective Construction Industry is not damaged but is kept intact as it transforms in a substantial and meaningful way.
Three years of negotiations between SAFCEC, the listed Construction companies and the PICC Ministers, with input from the BBCBE resulted in a Settlement Agreement (also known as the Voluntary Rebuilding Program or VRP) which was concluded and signed on the 11th October 2016. The Agreement includes the withdrawal of SANRAL and possible public sector civil claims and a settlement with the CIDB. There are two aspects to the VRP, a cash contribution and an empowerment commitment. Between the seven companies a total R1,5 bn is to be paid in cash over the twelve year period into the “Tirisano Fund” for:
- Enterprise development programs
- Bursaries for black engineers
- Black artisan training
- Maths and science school projects
- Special social upliftment
- Engineering resource development for Provincial Departments
The Tirisano Trust will be formed to be the custodian of the VRP, trustees will come from SAFCEC, the listed companies and those appointed by the PICC ministers with the BBCBE also having a Trustee. The Trust’s primary role will be to measure progress in meeting the objectives set out and decide on what projects the R1,5 bn will be spent on – the VRP provides guidelines.
For the Empowerment Commitment, the companies have two options – either sell more than 40% shareholding in their SA construction businesses to black people or alternatively mentor two or three black owned companies to achieve a combined turnover of at least 25% of the Listed Companies’ turnover within 7 years.
In WBHO’s case we have committed to mentor and develop Edwin Construction, Motheo Construction and Fikile Construction and we extend a warm welcome to these companies.
There are many positives in the VRP. This Settlement Agreement is a ground breaking model of effective and massive transformation. Also, an on-going, beneficial and co-operative relationship between the construction industry and the Government will be fostered through regular engagements between the CEO’s and Ministers. All CEO’s of the participating listed companies and beneficiaries signed an “Integrity Agreement”. All “irregular” public sector tender awards will also be exposed and dealt with at the highest ministerial level.