If SA fixes its finances, who will be left to build anything?
If the government turns things around it will find all the contractors and engineers on their knees
When the SA economy eventually turns, allowing the government to revive its long-stalled infrastructure programme, which contractors and engineers will still be around to do the work?
The industry-wide drought that has persisted since the 2010 Soccer World Cup has wiped out deep pools of institutional knowledge and expertise. Former industry stalwarts Group Five, Basil Read and Esor are on their knees – they are fighting for survival via business rescue processes. Others, including Erbacon, have already been consigned to the history books. Those that are left are hardly a picture of health. Stefanutti Stocks has a market capitalisation of just R129.8m, while Aveng’s share price is now just 2c, from almost R50 a decade ago. Murray & Roberts and WBHO have weathered the storm better, but that is thanks largely to offshore operations. In WBHO’s case, Australia accounts for 54% of the contractor’s order book, and the UK 19%.
In addition to the vastly reduced capacity in the local industry, WBHO said last week skilled staff are emigrating from SA at a faster pace than before. If the SA government manages to repair its finances and get the infrastructure build off the ground, it may find there are few domestic contractors left who are able to tackle large, complex projects. The least it can do in the interim, as it grapples with its hefty debt burden, is ensure that existing projects do not get derailed by local communities. ..