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Construction mafia moves from KZN to Joburg

Community gangs claim to be fulfilling government’s mantra of radical economic transformation.

It’s a shakedown that’s been going on for several years in KwaZulu-Natal, but is now rearing its head in Johannesburg. Local community gangs, often armed, threaten to shut down construction sites unless they are given 30% of the work.

“The mafia is particularly prevalent in the Durban metro area, which is why I will no longer work in this area,” says a construction manager who asked not to be named. “I was previously working on a construction site in Pietermaritzburg and these guys would turn up every day, cocking an AK47 in front on my office. You have little option but to agree to their terms, which means 30% of our sub-contractors are imposed on us.”

The so-called construction mafia has organised itself into business forums, one of which is the Delangokubona Business Forum, reportedly comprising more than 3 000 members, according to the Sunday Tribune.

The gangs usually demand that construction managers employ their members, often at extortionate rates – in one case, a construction company was ordered to employ a bricklayer at R2.50 a brick when the going market rate is R0.80 a brick. Several sites have had to let other workers go to make room for the so-called mafia workers, who frequently lack the skills needed for the jobs. Nor are they necessarily local. Equipment and materials are reported to have been stolen in some instances when Forum workers have been employed.

Peter Barnard, a partner at Cox Yeats Attorneys, has won around 30 court interdicts against multiple business forums on behalf of construction firms in KwaZulu-Natal.

“It seems that this all started in February 2016 when a crowd stormed into the Durban mayor’s office demanding that local suppliers and contractors be given work,” he says.

“From what I understand, they left that meeting with the impression that local suppliers and contractors would be awarded 30% of government construction contracts. They obviously misunderstood what was being conveyed. The new Regulations to the Preferential Procurement Policy Framework Act, which govern most state projects, are complicated and don’t create an automatic entitlement to work.  

“They obviously heard what they wanted to – and have proceeded on the basis that they are entitled to 30% of all work on projects. From about March 2016, ‘business forums’ started hitting construction sites and demanding work.”

Barnard says that virtually every major development and Project in KwaZulu-Natal has been affected by one or more forums.

The “construction mafia” rejects accusations of thuggery, claiming to be fulfilling government’s mantra of radical economic transformation by ensuring that 30% of sub-contracting work is given to locals. 

Recently, construction of the Oceans Hotel in Umhlanga, backed by businessman Vivian Reddy, was shut down for several months after work was disrupted by Forum members. Last year WBHO downed tools for several weeks on the R1,8bn expansion of the Suncoast Casino when Forum members stormed on site demanding a slice of the action. One manager with a major construction firm confirmed that the mafia has now appeared on construction sites in the north of Johannesburg.

Some site supervisors and managers have started toting guns in self-defence after numerous instances of on-site assault. In some cases, site managers have been shot at or threatened.

Several construction firms have had to approach the courts to interdict the Business Forum from intimidating or harassing construction workers. Among the companies awarded interdicts against the group are Tongaat Hulett Developments, Vumani Civils CC, WK Construction SA and Water Bles Investments. The interdicts prevent members of the Delangokubona Forum from intimidating or harassing workers at the Sibaya Precinct development in Umdloti.

The troubling aspect is that the intimidation tactics appear to be working.

Many firms are forced to enter into negotiations and reach a settlement with the various business forums. Construction projects with a 15% profit margin cannot afford time delays, given the highly geared nature of these projects. Delays add to the costs, so companies will often prefer to come to an accommodation with Forum members rather than run the risk of further disruption and intimidation.

Local government officials and police have promised to stamp out such instances of thuggery, but construction managers say the city government in Durban is sending out mixed signals, promoting “radical economic transformation” on the one hand, while promising to stamp out thuggery on the other.

“The difficulty that companies have is that they are already employing locals and complying with the law,” says Barnard. “They have to meet government requirements to be awarded the tenders and projects in the first place. Then, after moving onto site, they now have another group, or several of them, coming in and demanding that they be employed. If they don’t get what they want, they often shut the site down.”

Some site managers say the police will respond only when a serious crime such as assault is involved. Barnard says the interdicts awarded by the Durban High Court include an action to compel the SA Police Services to do whatever is necessary to give effect to the court orders. “The SAPS have been very good in executing on these orders, and that has helped bring some order to the situation.”

One construction executive who asked not to be named says that although his company won an interdict against the business forum, it proved difficult to serve on the individuals involved. “So although we won the interdict, this did not stop them. Many of the people who were intimidating us were not even local. We then started working with the local community and explained that these people were trying to take their jobs. It was at this point that things started to quieten down.”

A water project for eThekwini Municipality in KwaZulu-Natal has been repeatedly disrupted by business forum members, despite an interdict being awarded to the contractors. “We are hoping for a final order that will allow the SAPS to make an arrest in this case,” says Barnard, adding that this would be the first such order that he is aware of.

There is a danger that some struggling construction firms will be put out of business by these mafia-style tactics. It remains to be seen how forcefully police in other parts of the country deal with cases of intimidation as the mafia spreads from Durban.

COMMENTS   26

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Ciaran, very good to see that someone is at least reporting on this. The eThekwini municipality and the SAPS just shrug and walk away. And interdicts would only mean something in a country where the rule of law applies. In SA, where the SAPS is just a state subsidised armed gang – one of many, one should add – a High Court interdict means sweet fa.
There are only two alternatives:
Cave in to the gangsters, lose money on each project and pretty soon close your business down, or
Fight back with your own armed gang. The latter would only be an option for the unhinged and the desperate, so it has not happened yet, as far as I know.
In five years’ time only the gangsters will be in the South African construction industry.
I suppose readers here have noticed that the listed construction companies are all basically insolvent or pretty close to it. Another great SA success story.

Darwin, yes you are unfortunately 100% correct. Gangsters and criminals holding the country to ransom.

One gets the perception that a large part of the SA population could be gangsters and criminals. I wonder if this percentage is as high amongst our general population as it is in Parliament…

Perhaps, there’s a third alternative: use force against force. Everything comes down to economics…compare the construction cost of paying ‘Mafia Forum’ members what they demand OR use outsourced private security to place a few hidden snipers (with silencers) on nearby strategic positions that can cover the site-office etc. AK-47 wielding people can be taken out silently & also during the course of the work day, the odd site worker that does not wear a certain identifying marker, can be “plinked” off every hour or so.
Advantages:
(1) Cost will be less to sporadically hire ex-SADF mercenary men.
(2) Employment of snipers earning a living may open a new industry / past SADF skills retained in SA in such “sniper on call” industry.
(3) When a Forum-member is killed…it’s guaranteed the SARS WILL react.
(4) All Forum shit-stirrers disappears from site & move to a different construction site, the snipers gets re-contracted to new site, rinse & repeat until no shit-stirrers left.
(5) Construction can be delivered on-time & within budget.

Yes, maybe in a dream world, but it seems if violence is the ONLY language people understand 🙁

Otherwise, submit to their criminal demands, and pass on the costs to the consumer….S’Africans are quite used to that!

4th option: move construction activities outside criminal SA. If another building burns down in SA, just leave it as is to serve as “memorial” for following generations. Thus we learn the hard way.

Wait until they realize they can just shake down a business each week like the Mafia – much easier than working on a construction site.

This also seems to be creeping up in the signage industry given that many large signs in KZN and especially the Transkei are in very rural areas. The same brute force tactics are employed.

This is to be expected in a country where the state involves itself in the agreement between employer and employee. When the state abuses it’s powers to make laws, and dictate that certain individuals should be employed and others not, everybody start abusing whatever power they may have. In South Africa the AK47 yields greater power than the legislature, so we have rule by AK.

We have zama-zamas in mining and now zama-zamas in construction. We will soon have zama-zamas in state hospitals and at municipalities. People will use the AK47 and demand to be employed as a doctor at a state hospital or as a mayor at a municipality.

This is the example set by the state when they abuse their powers to determine who works where (Employment Equity), who gets contracts(BEE), who are to be partners in a business(BEE) and which groups will receive government funds (Black Entrepreneurs). ANC policies are turning the whole economy into a zama-zama scheme.

Just wondering whether this construction mafia issue is not a possible contributor to the Eskom power stations’ cost overruns?

This is the rule of law created by Zuma.
He must hang for this.

This is as a result of the ANC ‘promising – or rather false promising’ construction jobs to locals, as a way of trying to buy votes AGAIN.

The ANC is the party that desperately tries to stay in power and have hegemony by making false promises.

It’s not just in construction; in CT a landscaper with a big contract for the city also had to contend with locals in the area who demanded jobs on the spot.
So just HOW must the regulation in the PPPFA that refers to 30% local jobs be interpreted? Wish a legal expert would tell us.

This why so many mall roofs and walls collapse in Durbs?

As mentioned ANC lies coming home to roost.

Desperate times call for desperate measures – same as Venezuela, poverty starts to build up gangs and we’ve had poverty for a long time.

This happened on our site in Linbro Park. But the called themselves the Alexander Renewal Forum. We’ve brushed them off for now but I know they burned a few vehicles on another site up the road.

Complements of the ANC, construction workers are illegal immigrants who squat on vacant land in upmarket suburbs in Sandton. Maybe developers can negotiate for labour with SA citizens and ask CoJ to enforce their rights.

The Zuma mafia held this country to ransom for 9 years so I’m not surprised this is being attempted in other areas. Once the mafia and gangsters take-over (e.g. the taxi industry) we seem powerless as a country to do anything.

Time to take the law into our own hands – Private armed guards on site. Shoot first, ask questions later.

no questions, just a new extension in the foundation.

You mean go the way people in townships have been forced to do for years now to protect themselves against criminals because there’s no effective policing in townships!

What effects will “expropriation without compensation” have on the country in a few years?

Not in a few years – it’s going on already everywhere

What nobody realizes is that this is exactly what happened in the early 1930,s in Germany with the brown-shirts intimidating business and private citizens in this same way. This is not economic it is political and you will probably find that whoever is funding the EFF is behind this. Apart from the danger to construction companies and their workers, if this sort of behavior is allowed to continue – it will be the downfall of this country and EVERYONE will suffer the consequences – makes EWC look like chickenfeed!

Allow me to nit pick at a piont that you make.

I’m a senior estimator for 10years and can confirm that we make a third of the profit you suggest. Not sure where you get 15% from… but we make 5% margins

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