Businesses in townships and small towns are struggling as extortion gangs intimate and demand protections fees from them. This week police ministry deployed teams of investigators to the Eastern Cape to probe the violence and intimidation, Lindile Sifile and Herman Moloi report.
For three weeks, construction workers at a site where a R35m residential block is being built in Soweto could not work because of locals who are demanding a 30% stake in the project.
They had locked the gates into the site with a padlock, burnt tyres outside and intimidated any worker who tried to force their way inside the site in Jabulani.
Following weeks of negotiations between the company and the group of locals who call themselves SMMEs, work resumed on Monday this week.
“The bone of contention was around who should be given security work to look after the site at night. They (SMME) wanted to bring one of their own companies but we had brought our own subcontractor to secure the site. We have used SMME security before for the same project but we had four incidents of theft of building materials which resulted in a loss of over R500,000. We didn't want to take that risk again and that is where we had a disagreement,” said one of the company's managers.
The company also has another project where they are building a R65m shopping centre in Pimville, which has also been hit by disagreements over job opportunities.
Besides for security, the SMMEs are also accused of often forcing themselves into the tenders by demanding to be subcontractors.
“Even though ours are not a government projects where the main contractor is expected to offer 30% of our work back to the community, we are sometimes forced to work with the SMME to avoid clashes and project delays. We hire them to do simple jobs like painting, paving and bricklaying and then we bring our own subcontractors to do professional work like roofing and electrification. However, these guys (SMME) even fail to do these jobs and we have to redo the work after paying them,” said the manager.
WATCH | Work disrupted for three weeks at construction site in Soweto
Image: ANTONIO MUCHAVE
Businesses in townships and small towns are struggling as extortion gangs intimate and demand protections fees from them. This week police ministry deployed teams of investigators to the Eastern Cape to probe the violence and intimidation, Lindile Sifile and Herman Moloi report.
For three weeks, construction workers at a site where a R35m residential block is being built in Soweto could not work because of locals who are demanding a 30% stake in the project.
They had locked the gates into the site with a padlock, burnt tyres outside and intimidated any worker who tried to force their way inside the site in Jabulani.
Following weeks of negotiations between the company and the group of locals who call themselves SMMEs, work resumed on Monday this week.
“The bone of contention was around who should be given security work to look after the site at night. They (SMME) wanted to bring one of their own companies but we had brought our own subcontractor to secure the site. We have used SMME security before for the same project but we had four incidents of theft of building materials which resulted in a loss of over R500,000. We didn't want to take that risk again and that is where we had a disagreement,” said one of the company's managers.
The company also has another project where they are building a R65m shopping centre in Pimville, which has also been hit by disagreements over job opportunities.
Besides for security, the SMMEs are also accused of often forcing themselves into the tenders by demanding to be subcontractors.
“Even though ours are not a government projects where the main contractor is expected to offer 30% of our work back to the community, we are sometimes forced to work with the SMME to avoid clashes and project delays. We hire them to do simple jobs like painting, paving and bricklaying and then we bring our own subcontractors to do professional work like roofing and electrification. However, these guys (SMME) even fail to do these jobs and we have to redo the work after paying them,” said the manager.
In some instances, the SMMEs would offer to hire equipment for the contractor and then markup the price to make profit.
“The company is just surviving at this point. We are not making more than 2% in our profit margins because of this extortion and intimidation. We are working with the SMMEs because it is the only way to make means to survive. We also do not trust the people because they do not seem to understand how the construction mafia works,” said the manager.
The company did not respond to SowetanLIVE's request for comment.
About an hour away in the Midvaal area, site agent Xolani said he had to deal with members of Midvaal Group of Companies who constantly threaten to shut down their construction site, demanding a 30% stake in the project.
“One day a group of about 16 of them came to the site and started intimidating me and the workers. They asked for the project value. I kept calm because I'm from KZN and I know how to deal with Amadelangokubona (a group that is widely known for their involvement in construction mafia in Durban). We agreed that we will give them work but we soon learnt that despite calling themselves a business forum, they can't even draw up quotes and invoices. We had to help them do these things. They do not even have any history of work but we are forced to use them,” said Xolani.
The group is said to even impose their own community liaison officer, a position that is ordinally filled by the main contractor.
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