The development of Small, Medium and Micro Enterprises (SMME’s) is one of Coega’s top priorities, the corporation said following a 1 November meeting with SMME’s to discuss their participation in Coega projects.
The meeting was “ground-breaking and positive”, the Coega Development Corporation (CDC) said, paving the way for a better working relationship with SMMEs, especially in the Nelson Mandela Bay area.
The CDC already has strong policy backing a sustained programme to advance construction SMME’s in particular on various infrastructure projects both within the Coega industrial development zone (IDZ) and on external projects.
“Coega’s explicit mandate is socio-economic development, advancing the transformational agenda of the Eastern Cape and the country to create a lasting impact on communities; and it is common knowledge that small business is one of the central backbones of the economy,” said Ayanda Vilakazi, CDC head of marketing and communications.
“In acknowledgement of the fact that SMME’s are South Africa’s greatest hope for mitigating structural unemployment, the CDC has taken major steps since 2008 to enhance the participation of SMMEs on selected projects, particularly in the IDZ. Then as we grew into the role of implementing agent for government infrastructure projects, we developed a full SMME development programme for projects on a provincial level.”
The CDC aims to achieve, on an annual basis, a target of 35% SMME participation on all its projects. In the 2012/13 financial year the company exceeded this target reaching 41% participation across the IDZ projects and those in the Eastern Cape and KwaZulu-Natal.
Currently there are eight Coega-led construction projects planned, completed or underway in the IDZ, of these:
- DCD Wind Towers has exceeded 35% SMME participation on its construction site;
- The Zone 4 boundary wall had 100% SMME participation;
- The Vulindelela Accommodation and Conference centre was built using 100% SMME participation;
- The return effluent reservoir pipe line is projected to absorb 100% SMMEs;
- The Recruitment Induction Centre phase 4B reached approximately 25% SMME participation;
- The Recruitment Induction Centre phase 5 has exceeded the 35% SMME participation;
- The Transet National Ports Authority access road has reached 24% SMME participation; and
- The Bulk sewer is projected to reach 35% SMME participation.
Other Coega investors under construction, such as First Automobile Works and Air Products, elected to use self-appointed contractors to develop their plants and both have endeavoured to use SMMEs where possible. New investors such as Afrox have indicated that they will stimulate indirect job creation in the form of maintenance work, water treatment and office services and during the construction phase, will support local businesses supplying materials for the civil works.
“Currently, in total, 59 SMME construction firms are benefiting directly from work in the Coega IDZ – you can only just imagine the impact of this on the socio-economy of the city,” Vilakazi said, adding that continuous engagements with small business is crucial in understanding the challenges faced by SMME’s and the role Coega can play.
External projects across Nelson Mandela Bay include the Dora Nginza Hospital upgrade where the CDC is the implementing agent for the Eastern Cape Department of Health.
An estimated 500 jobs will be created through this upgrade. Vilakazi said the overall benefits of the project included 35% use of local SMME’s with Pro Khaya Construction (featured) being the first to benefit through the creation of about 60 jobs as well as skills development and training.
“About 11 other small businesses are directly involved in the Dora Nginza project – an indication of our commitment to contracting SMME’s,” Vilakazi said.
The Department of Roads and Public Works also uses Coega’s implementing services on its Roads Enterprise Development Programme (REDP) – an initiative specifically for up-skilling construction firms to meet the future infrastructure needs of the province.
Coega is in the third and final phase of the REDP, and during the previous financial year the CDC awarded a total of 78 opportunities to SMME’s, which successfully executed roads building and maintenance projects valued at R410-million.
Overall, 80% of the total roads construction projects have been awarded to SMME’s over the past year.
“Besides the opportunities created, the REDP also managed to provide the platform for 92 contractors to upgrade their Construction Industry Development Board status which enables them to bid for higher valued contracts in the future,” Vilakazi said. “Extensive business training and technical training workshops were also held for SMME’s to deliver successful projects.”
SMME’s are also set to benefit from mentorship as part of a new programme recently launched by the CDC. The Black Economic Empowerment Scorecard Improvement Programme (BEESIP) will assist 100% black-owned and black women-owned enterprises (BWOEs) to improve their broad based black economic empowerment (B-BBEE) status levels so they can access a wider range of opportunities.
The CDC will assist by conducting preliminary BEE verification audits and formulating BEE plans. The programme will also offer hands-on support to qualifying companies through its newly established BEE Support Desk.
“The programme forms part of CDC’s commitment to ensuring that all disadvantaged groups are able to access opportunities within the supply chains of CDC and other public entities thereby becoming a beacon of hope for SMME’s,” said Vilakazi.
Alan Straton
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