The South African government is taking new steps to crack down on “construction mafias” exploiting new investments for infrastructure work.
The “mafias”, which pose as local business forums and lobby construction projects to use local contractors, are under target by new rules from the Department of Public Works and Infrastructure that take a harsher approach to organized syndicates.
In an interview with BizNewsTV, Dean Macpherson, Minister of Public Works and Infrastructure of South Africa, said that several branches of government had been infiltrated by “construction mafias”, which are pulling money out of public investment and delaying critical infrastructure projects.
Macpherson said: “[KwaZulu-Natal] as a province, unfortunately, has a history of violence that is rooted in the political discourse of our province and of our country, and that seems to have transcended into the construction space now where we have what we would call the construction mafia, bringing projects to a stop.
“They use extortion, violence, intimidation, and all different types of tactics to effectively seek money out of construction companies in order that they can further their own interests.
“So it’s incredibly destabilizing for our province and also for the investment climate that we need to create because investors don’t want to put their money into projects that are going to be delayed or cancelled. It’s ultimately our communities that suffer because infrastructure projects aren’t being rolled out.”
The new crackdown will see investigations into several government departments, including the Department of Public Works and Infrastructure itself. In the interview, McPherson admitted that “not everyone in the Department of Public Works and Infrastructure are saints and benevolent, and there are elements within the department that I believe to be problematic.”
The crackdown includes greater incentives for people to come forward with tipoffs, as well as harsher jail sentences. The South African Police Service are also being given more resources to tackle the groups.
Newsweek contacted the Department of Public Works and Infrastructure for more information on the situation.
Emerging after the construction boom of 2010, when large projects were used to prepare South Africa to Host the FIFA World Cup, so-called construction mafias have grown stronger throughout the decade.
The Department of Public Works and Infrastructure now describes them as “very organized, very connected, and very well-armed criminal syndicates,” which take advantage of laws that decree that 30 percent of public sector projects be subcontracted to local participants.
They do this by posing as local contractors and stakeholders, and then going to construction sites in the area to demand money allocated towards the project.
This means that significant chunks of state investment in infrastructure is given to contractors with no intention of doing the construction, drastically halting infrastructure progress.
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