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Deputy Minister of Trade and Industry, colleague Lindiwe Hendricks
Acting Chief Executive Officer of Ntsika, Mr Lefa Mallane
Distinguished Guests
Ladies and Gentlemen

It is my pleasure to officiate at this occasion where we will sign an official Memorandum of Understanding between Ntsika Enterprise Promotion Agency and the Department of Public Works.

It has always been a primary requirement of the Emerging Contractor Development Programme (ECDP) of Public Works to establish interaction and meaningful links with other institutions that provide useful services to emerging contractors. A lack of suitable support interventions in the past has hamstrung accelerated advance of the emerging contractor side in the construction industry in South Africa.

Emerging contractors have been experiencing problems such as:

* The correct completion of tender documents;
* Providing accurate pricing;
* Difficulties in formalising their businesses in order to deal with the Department as a legal entity; and
* And in acquiring materials on credit.

Both Ntsika and Khula have featured prominently in the list of institutions that could provide the necessary support to the SMMEs in this important industry. The Memorandum of Understanding that we are signing today will enable emerging contractors registered on the ECDP database to access support services from the Ntsika Tender Advice Centres in respect of:

* Information on business opportunities;
* Assistance to complete tender documents;
* Assistance in the management of contracts; and
* And in linking contractors to suppliers.

Our co-operation is of significance for various reasons:

* Firstly, it will enhance the capacity, programmatic performance and effectiveness of both entities in promoting emerging contractors. This means that the emerging contractors experiencing the problems I have mentioned, can, through intervention, be assisted to tender competitively and to improve on the management of their businesses.

* Secondly, it will improve the accessibility of support interventions to emerging contractors. Ntsika has already established around 27 Tender Advice Centres countrywide. Through this partnership, access to this existing infrastructure is provided to emerging contractors registered on the ECDP database. This means that the existing knowledge base of Ntsika on SMME development, their mentorship programme and links to other service providers are directly accessible to registered emerging contractors.

* Thirdly, it will facilitate improved monitoring of the performance of those receiving support.

* Fourthly, it will promote sharing of best practises in the provisioning of support to emerging contractors.

* And lastly, the momentum created by the success of the co-operation will lead to other clients and stakeholders participating in the co-operation.

Ladies and Gentlemen, the aim of formalising the co-operation is to strengthen the good relations that have been in existence between the two entities.

The existing informal relationship between the two institutions already cover the following areas of co-operation:

* Tender Advice Centres (TAC) provide assistance to contractors registered on the ECDP database on tendering and related issues.

* The DPW, Ntsika and the Black Construction Council (BCC) facilitated the development of the Contracting Entrepreneurial Training (CET) programme

* Sharing of information on performance of contractors.

* DPW participated in Ntsika's group purchasing pilot programme, to ease access to material by emerging contractors.

The ECDP has, through its helpdesks, referred emerging contractors to the TACs with regard to tender related matters and have been sharing information on available support to emerging contractors.

The co-operation has been beneficial to both parties and most importantly to emerging contractors. The positive experience gained from the informal co-operation is the key motivation for a need to formalise our agreement.

Our signing of this Memorandum of Understanding comes at a time when the capacitating and development of emerging contractors has never been more urgent.

Recognising the need of a comprehensive development strategy, government passed a white paper "Creating an Enabling Environment for Reconstruction, Growth and Development in the Construction Industry" in May 1999".

This policy initiative represents a significant milestone in the development of the South African construction industry. It attempts, for the first time, to establish an enabling framework within which the construction industry can play a more strategic role in social development and economic growth. It is our belief that this framework provides the basis for an integrated industrial development strategy.

The broad goals of such policy initiatives are:

* To enhance delivery to meet the basic needs of the majority of South Africa's population;

* To maximise the role of the construction industry as a distinct economic sector which contributes directly to GDP, which provides the necessary infrastructure for other industrial sectors to develop, and which stimulates further growth (forward and backward linkages with other industrial sectors); to obtain maximum benefit from the industry's job creating potential; and

* To promote development of the country's human resources and the practical demonstration of our transforming society.

With these goals in mind, it is indeed significant that industry-wide debate on the policy has yielded broad consensus on the need for a range of strategic programmes designed to:

* Develop a stable delivery environment, with measures to counteract demand volatility and to promote a stable employment framework.

* Enhance industry performance through procurement strategies to promote best practice and enhance competitiveness.

* Foster a human resource development strategy, which is holistic, sustainable and accessible.

* Promote new industry capacity and the emerging sector through affirmative action in support of historically disadvantaged individuals and enterprises.

* Develop the capacity and role of the public sector to support enabling programmes and improved public sector infrastructure delivery.

We have to concede that the support to emerging contractors to date has largely been uncoordinated, fragmented and non-cohesive.

This formalised co-operation will be a catalyst of co-operative governance, contributing to enable emerging contractors to play a meaningful role in government's transformation agenda. Working together, the data acquisition, management and information sharing will enable both parties to access sources of contractor competencies and to foster programmatic collaboration.

Ladies and Gentlemen, in conclusion I would like to express my sincere appreciation of the good work done by officials from both organisations in promoting co-operative governance. I sincerely hope that other government departments and private sector organisations providing essential services to emerging contractors will join in this effort to help those emerging businesses to grow into meaningful participants in the mainstream economy.

Issued by: Ministry of Public Works, 6 April 2001