The 30% policy was introduced to empower small, medium, and micro enterprises (SMMEs) by allocating a portion of government project value to them. This initiative aimed to integrate SMMEs into the mainstream economy, create job opportunities, and enhance skill development.
However, criminal groups have exploited this policy, halting projects by intimidating contractors to demand payouts. This behaviour has derailed infrastructure and housing projects, with contractors abandoning sites in fear of threats.
PROJECTS WORTH R63BN DISRUPTED
South Africa’s construction sector contributes approximately 3% to the GDP and employs over 1.3 million people. The industry is crucial for infrastructure development and job creation, but its progress has been significantly derailed by criminal groups.
These “construction mafia” groups use tactics such as extortion, intimidation, violence, and sabotage to demand a 30% share of project budgets without contributing any work. This unlawful activity not only stalls projects but also damages investor confidence and threatens the livelihoods of countless workers.
According to Businesslive Since 2019, more than 180 infrastructure projects, valued at R63 billion, have been affected. From halted housing developments to incomplete schools and hospitals, the consequences of these disruptions have been dire, leaving communities deprived of essential services.
NATIONAL TREASURY BRIEFS PARLIAMENT
During a briefing to the Portfolio Committee on Trade, Industry and Competition, the National Treasury highlighted the severe challenges posed by the so-called “construction mafia.” Officials noted that their activities have hampered project completion, leading to significant financial and social consequences.
Departments such as Trade, Industry and Competition, and Performance Monitoring and Evaluation, also updated the committee on measures to ensure compliance with local content regulations and transformation goals under the Public Procurement Act.
COMMITTEE CALLS FOR STRONG ACTION
Mr Mzwandile Masina, the Chairperson of the committee, condemned the misuse of the 30% empowerment policy.
“This intervention was never meant for criminals but for well-meaning South Africans seeking to grow and contribute to the economy. Unfortunately, thuggish behaviour has brought projects to a standstill, frustrating government’s good intentions,” he said.
The committee strongly supports enforcement measures to close existing loopholes and prosecute offenders. “It is time to clamp down on this kind of criminality and protect the integrity of empowerment policies,” Mr Masina added.
IMPACT ON COMMUNITIES
Earlier this year the former Minister of Police Beki Cele said that extortion activities have left communities in distress as delayed housing and infrastructure projects deprive citizens of critical services. The government has reiterated its commitment to ensuring these policies benefit the intended recipients — SMMEs and their employees.
LOOKING AHEAD: WHAT’S NEXT?
The proposed criminalisation of extortion by the construction mafia is a significant step toward restoring order in the construction sector. Once operationalised, this regulation will empower law enforcement agencies to act decisively against offenders, safeguarding project delivery timelines and integrity.
What do you think about the government’s decision to criminalise construction mafia extortion?
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