WBHO raises alarm over construction mafia

JSE-listed construction company Wilson Bayly Holmes (WBHO) called on the government to swiftly deal with rampant crime and, in particular, the infamous construction mafia. 

In its latest annual report, WBHO chairman Louwtjie Nel said the construction sector faces multiple headwinds, which have seen the industry shrink by 44% over the past six years. 

“There is an urgent need for South Africa to prioritise upholding the rule of law. The adverse effects of not doing so are becoming increasingly obvious,” Nel said in his letter to the shareholders. 

“Crime and corruption function as significant deterrents to business and investor confidence, demanding swift and decisive action.”

“We strongly urge the government to combat the growing tide of criminal extortion and corruption that is affecting South African society, particularly within the construction sector.”

Nel mainly focussed on the “persistent challenge of ‘business forums’ that continue to disrupt projects”. 

These forums are more commonly known as the construction mafia and invade construction sites nationwide, demanding money or a stake in the projects. 

“This issue requires immediate attention. Despite numerous initiatives, many in conjunction with the government, to address this scourge, it still persists,” Nel said. 

“The South African business community is willing to collaborate and has come together under organisations like Business for South Africa to work with the government in developing strategies to combat crime and corruption.”

President Cyril Ramaphosa, in his latest address to South Africa, said the South African Police Service has established 20 economic infrastructure task teams to protect critical infrastructure and take on the construction mafia. 

The construction sector relies heavily on substantial public and private investment in infrastructure to enable real growth. 

Rising crime and corruption has deterred companies and the government from making significant, long-term investment, resulting in minimal growth for construction firms like WBHO. 

However, there have been some positive developments in this regard, with a substantial number of road construction projects awarded by the South African National Road Agency.  

Despite the challenges faced by Eskom, there has still been a notable level of investment in power stations in recent years, and private sector spending in the renewable energy sector has escalated significantly.