State-owned South African National Roads Agency Limited (Sanral) and nongovernmental organisation, the National African Federated Building Industry (Nafbi), on Thursday signed a memorandum of understanding (MoU) aimed at developing small contractors within the South African construction industry.

Through this agreement, which will be in place for a period of five years, Sanral and Nafbi seek to break down monopolies in the industry, while also tackling issues such as unemployment, poverty and inequality.

The agreement has the option to renew after five years, if both parties agree.

According to Sanral transformation manager Ismail Essa, the two parties entered into the agreement on matters of mutual interest in order to best serve their strategic, transformation and empowerment interests by exploring options and solutions to maximise the participation of small contractors involved in Sanral projects.

With regards to Sanral’s transformation policy, CEO Skhumbuzo Macozoma on Thursday told delegates attending the signing ceremony that, especially with 2018 having seen several construction businesses being liquidated, new entrants and small contractors need to be mindful of the challenges in the industry.

Here, he noted that all construction industry players need to not just manage expectations in terms of delivery and costs, but that players will need to “learn how to work together and pool all resources” to ensure the industry’s sustainability and success.

Macozoma also called for the “critical re-evaluation” of the industry’s overall transformation policy and said only one singular policy needs to be implemented across the sector, stating that this would ensure a “mobilisation in the industry to build the capacity to enable service and product delivery”.

The MoU is one of several recently signed by the roads agency to “level the playing fields” in the industry.

As part of the agreement, Sanral will host information sessions intermittently for capacity building and information sharing. Nafbi will, through these sessions, also provide mentoring in the areas of technical competence, financial and human resources activities, as well as contractual and legislative matters.

The mentorship will be rolled out nationally, Nafbi president Aubrey Tshalata told attendees, adding that mentors “will be drawn from years of experience in road construction and maintenance, [as well as] technical and financial competence”.

He dubbed the MoU as a “gamechanger for the industry”, adding that the partnership with Sanral was key to not just promoting the increased implementation of black economic empowerment (BEE), but in preparing Nafbi members to participate in Sanral projects.

According to Tshalata, the MoU will bring about local economic growth, improve project quality and skills, as well as accelerate BEE.

“We want to develop real sustainable contractors who are able to compete and perform,” he said.