Cosatu wants state construction firms
COSATU has urged the government to establish a state construction and cement and a state steel company to ensure affordable inputs into its ambitious infrastructure programme.
Cosatu general secretary Zwelinzima Vavi said the programme in its current form would not progress well because it was likely to be abused through tenders.
"Cosatu stands by the view that at the stage of development we are in, we will not move decisively without having a strong state bank, a state construction and cement company, and a state steel company to ensure affordable inputs into the infrastructure programme," he said.
Vavi was speaking at the Economic Development Infrastructure conference in Boksburg at the weekend.
He criticised the government over its infrastructure programme, saying: "The state has mainly limited itself to expenditure on infrastructure, not construction. This has led to major wastage of resources through, for example, overpricing of tenders."
The major infrastructure plan was announced by President Jacob Zuma in his State of the Nation Address earlier this year.
The plan lists 17 projects in many sectors, including, rail, road, school and hospital construction across all nine provinces.
Vavi said the state did not control the value chain of inputs that went into infrastructure construction.
"There is a real possibility of these being excessively inflated by the monopolies that produce them. The effect is a transfer of resources from the state to the rich," he said.
He told delegates the government had to devise more developmental ways of financing long-term infrastructure development.
"The state cannot build a road and at the same time pay interest at a rate that is determined by market forces," Vavi said.
He also took a swipe at private contractors, saying they had cut corners in a bid to maximise profits . Vavi gave an example of the quality of housing that had been developed for the government by the private sector.
"It was estimated by the Minister of Human Settlements that 50000 houses have to be rebuilt because of poor workmanship. This amounts to R1-billion. At a wage of R3000 (a month), this money could have created 5555 jobs that would last for a period of five years, lifting an estimated 20000 South Africans out of poverty," he said.