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Construction Industry Charter Progress Update

Construction Industry Charter Progress Update. Prepared for: Portfolio Committee Prepared by: Lydia Bici Date: 17 November 2004. Recap . Procedural issues Integrated Management Committee Technical teams Role of government Launch of the charter 04 0ctober 2004.

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Construction Industry Charter Progress Update

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  1. Construction Industry CharterProgress Update Prepared for: Portfolio Committee Prepared by: Lydia Bici Date: 17 November 2004

  2. Recap • Procedural issues • Integrated Management Committee • Technical teams • Role of government • Launch of the charter 04 0ctober 2004

  3. Construction Transformation Charter (1) 1. Process Issues • Charter process launched by Minister on 4 October 2004 • All technical committees operational • Integrated Management Committee comprising of all stakeholders manages the process • Work plan for the Charter process developed • Anticipating Charter to be submitted to DTI for approval at end of July 2005

  4. Construction Transformation Charter (2) 2. Technical Committees (TTs) Feedback • All TTs operational • TTs work to be complete by December 2004 • Corporate Social Investment (CSI) TT • Definition of CSI has been reviewed and reworked. The working definition incorporates projects that are aimed primarily at black groups, communities and individuals that contribute towards transformation and have a strong developmental approach.

  5. Construction Transformation Charter (3) • Corporate Social Investment (CSI) TT (cont) • Further discussions necessary irt: • Whether CSI projects should be targeted to CI or to the society as a whole • Possibility of premium scoring or bonus points in the CI • Costing time and skills put into dev projects • Exemptions of certain companies from CSI • Approval of CSI projects

  6. Construction Transformation Charter (4) • Ownership and Control TT • The definition and application of ownership was reviewed and redefined to apply to South African operations of enterprises operating in the construction sector. • Other issues for discussion included: • Whether a subsidiary could count control at a group level • Acquiring equity on a conditional, deferred basis shall not be counted as direct ownership until equity is actually transfered • Whether the Charter should prescribe where companies should implement BEE ownership

  7. Construction Transformation Charter (5) • Procurement • Definitions • Basic definition accepted as “ all expenditure for goods and services including capital expenditure, excluding: expenditure classes covered elsewhere in the charter (salaries, wages, csi), all VAT payable, goods which cannot be sources locally or goods specified by client”

  8. Construction Transformation Charter (6) • Procurement (cont) • Definitions • Proposed that premium scoring be applied on spend on black women women-owned companies, black owned companies or companies rated A • Spend on black empowered companies and companies rated B • Spend on black owned labour only contractors at 50% of actual spend • Capital expenditure to be counted at the time of placing the order and not amortised over the lifespan of the asset.

  9. Construction Transformation Charter (7) • Human Resources • The TT has worked on definitions, reviewed challenges as they related to HRD in the CI and made recommendations • Interventions: • Mentoring of black people and designated groups • Development of the youth through learnerships and apprenticeships, bursaries • Increase direct training costs spent on training • Compliant with the legal requirements • Increase level of black representation within management

  10. Construction Transformation Charter (8) 3. Process forward • TTs’ outputs to be further refined and planned for completion by December 04 • IMC to have a workshop on 25/26 Nov 04 • An Indaba with all stakeholders planned for early next year • Provincial briefings planned for beginning of February 05 • 1st draft of Charter by end December 04

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