SA Affordable Housing July - August 2015 | Issue: 53 by Trademax Publications

July - August 2015 // Issue: 53

COMMUNITIES | INFRASTRUCTURE | DEVELOPMENT R216 per annum incl.

13311

MAKING

FUNDING FOR THE DEVELOPMENT OF AFFORDABLE HOUSING HAPPEN

Nedbank Property Finance transforms development opportunities into quality communities. At Nedbank Property Finance we believe that home ownership and affordable housing are critical drivers of growth and transformation in society and the economy. Thatâ&#x20AC;&#x2122;s why we are committed to providing dynamic funding for key affordable housing developers. In this way we can enable the construction of affordable, quality housing for as many South Africans as possible. For more information call 011 295 6647. Urban Ridge, International Housing Solutions (Pty) Limited, Midrand.

nedbank.co.za

Nedbank Limited Reg No 1951/000009/06. Authorised financial services and registered credit provider (NCRCP16).

JULY - AUGUST 2015

ISSUE: 53

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Trademax Publications SA Affordable Housing Communities | Infrastructure | Development

Tel: 0861 727 663 Fax: 0866 991 346 Email: info@trademax.co.za www.trademax.co.za Postnet Suite 241 Private Bag X103 N1 City 7463

CONTENTS 10

EDITOR'S COMMENTS

UPCOMING EVENTS

HOME BUYING

PUBLISHER: Billy Perrin billy@trademax.co.za 082 266 6976 EDITOR: Tracy Swain editor@trademax.co.za

LIFESTYLE DEVELOPMENT

ADVERTISING SALES:

COVER STORY

kylin@trademax.co.za

FINANCE & INVESTMENT

LAYOUT & DESIGN:

CONCRETE SLABS

Craig Patterson

WOMEN IN CONSTRUCTION

FINANCE

SUBSCRIPTIONS:

CEMENT & CONCRETE

belinda@trademax.co.za

GAUTENG GOVERNMENT SERVICE

WOMEN IN CONSTRUCTION

MACHINERY

BATHROOMS

RENTAL HOUSING

LAW & REGULATIONS

Kylin Perrin

craig@trademax.co.za

Belinda Thwesha

DISCLAIMER The views expressed herein are not necessarily those of Trademax Publications. Although we have done our best to ensure the accuracy of our content, neither Trademax Publications nor SA Affordable Housing magazine will be held liable for any views expressed or information disseminated, in editorial content or advertisements, in this issue.

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EDITOR’S COMMENTS

Learning the ropes The editor’s seat at SA Affordable Housing magazine certainly provides a fascinating point from which to learn about the affordable housing value chain as it relates to South Africa’s built environment. And whilst I am learning more every day in my new role here, I am hopeful to get to learn a little more about you, our readers, so feel free to send me an e-mail -- my inbox is never too full.

n a short time, I have been enlightened to the importance of traditional building materials and methods within this sector, but in equal measure, it’s interesting to observe the demand for alternative building systems. There are many schools of thought on traditional versus alternative, but I think we can all agree on the desired outcome – we need to work together to alleviate the housing backlog to enable us to radically transform the lives of the marginalised. Yes, there are indeed challenges in this market. Some of which are the cohesive creation of new approaches, whilst implementing traditional building techniques. Others include developing new spatial conditions that successfully link quantitative and qualitative dimensions. Take heed, although progression might be slow, there’s certainly steady progress taking place. I recently read about the Government-proposed incubator programme aimed at training small contractors in all facets of construction. And women are increasingly being acknowledged for their contribution, which we heartily support. In the spirit of upliftment and in celebrating remarkable women in construction (August is Women’s Month, after all), we take a look at the NHBRC Women Empowerment Programme (page 32).

We also learn about Indigo Kulani’s MD, Sibongile Manganyi-Rath, whose tenacity and resilience has seen her sail through challenging times in the industry (page 24). Quality is a primary objective in construction, and we are so pleased to show you the Dune Crest affordable lifestyle development (page 10) as well as what is possible through the Construct Capital projects (page 38). Both these affordable housing endeavours embody the essence of quality, whilst providing dignified housing opportunities to deserving South African families. With a steady stream of new construction-centric legislation out for comment, it would appear that the industry is learning to effectively collaborate with the respective stakeholders – indicating that we might just be coming of age to innovatively respond to the housing shortage. Let’s change South African lives for the better. Welcome to our July-August issue of the SA Affordable Housing magazine. Enjoy the read! Tracy

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BUILDING A

NEW HOME?

MAKE SURE YOU USE A NHBRC REGISTERED BUILDER FOR PEACE OF MIND. Building a new home is one of life’s most exciting milestones. But few things can ruin the occasion like defects that show up long after you’ve parted with your money. It doesn’t have to be this way. Work that is faulty and incomplete due to shoddy workmanship can be avoided if you stick with an accredited builder. The NHBRC was established by law to protect you, the housing consumer. Make sure you use a NHBRC registered builder and that your home is enrolled with us so that we can protect you.

Fraud Hotline: 0800 203 698

www.nhbrc.org.za @NHBRC

NHBRCSA

NURCHA is dedicated to promoting transformation within the affordable housing market through the provision of competitive lending facilities to emerging and established developers. We seek to address the national backlog of housing whilst promoting asset creation and employment opportunities. The NURCHA Affordable Housing Programme has established itself amongst the market leaders in the provision of funding towards affordable housing projects. We invest in a variety of projects encompassing site and services, sectional title and the GAP market. Our lending criteria ensure that each client’s solution is tailor made according to the clients specific requirements. We have a fully resourced in-house loan management system and a growing client base across all provinces. Our property interests cover a broad spectrum of asset classes within the affordable housing market, including strategic partnership established with international financial institutions, leading local commercial banks, asset managers and other state owned entities.

CONTACT NURCHA: Tel: 0861NURCHA (687242) / 011 214 8700 Fax: 011 880 9139 Email: info@nurcha.co.za Website: www.nurcha.co.za

EVENTS

UPCOMING EVENTS CAPE CONSTRUCTION CONFERENCE & TRADE EXPO

The Cape Construction Conference & Trade Expo is centred around the building and construction industry in the Western Cape. The forum covers the entire value chain and targets small, medium and large enterprises. The event features a 2-day strategic conference, an interactive exhibition with the latest products, tools and technologies, as well as a workshop training programme that includes commercial and DIY content.

12 & 13 AUGUST 2015, CTICC, CAPE TOWN View www.cape-construction.co.za for more info

100% DESIGN SOUTH AFRICA 6 - 10 AUGUST 2015, GALLAGHER CONVENTION CENTRE, JOBURG View www.100percentdesign.co.za for more info

THE SARMA READYMIX CONFERENCE

With 2 500+ attendees, 25 expert speakers, 80+ exhibiting companies and 10 free-to-attend workshops, the Cape Construction Conference & Trade Expo is the must attend event for construction professionals.

13-14 AUGUST 2015, MISTY HILLS CONFERENCE & EXHIBITION CENTRE, MULDERSDRIFT View www.sarma.co.za for more info

MASTER BUILDERS SA CONGRESS 16 – 17 SEPTEMBER 2015, JOHANNESBURG EXPO CENTRE View www.mbsa.org.za for more info

SA Patent no. ZA2011/01062

Brick easy is essentially a system to lay bricks in a new and improved manner. The only tool required for the actual laying of the bricks is a pair of gloves for the bricklayer and the other components of the team. Any labourer with a minimum amount of training can easily be part of a team of three that can lay 500 bricks in an hour. THE STRUCTURAL BENEFITS OF BRICK EASY: The other important function which the profile performs, is the strength offered when the brick is laid against it – as opposed to virtually zero strength of the traditional fish line. The bricklayer is able to force the brick flush against the profile and push the next brick and mortar vertically to close the gaps between bricks. This means that there will not be any air gaps between bricks and that the mortar will be adhesive to the entire brick, making the brickwork very strong. The Headed or English bond which is seldom used nowadays, is easy to lay with this system. By using the mortar box to spread the fluid mortar, the bricklayer simply has to slide the brick over, taking enough mortar with the brick to push against the next brick and close the vertical joint completely.

HIGH PRODUCTIVITY: THREE SEMI-SKILLED WORKERS 500 BRICKS PER HOUR Giuseppe Dalla Torre +27 (0) 83 305 5191 gadallatorre@telkomsa.net

The little building pictured, measuring approximately 5m², was not only built for the purpose of the SABS test, but also to see how quick a building labourer could learn how to use the Brick Easy System. The SABS test was successful on all the requirements and parameters and a Certificate was issued. With a little bit of supervision, the three building labourers were able to lay six hundred bricks in the first hour, and two hours later the job was completed. W hen the time came to demolish the little building, I used a two and a half ton fork lift with a weight of four tons. I pointed the forks two brick courses from the top of the building, kept a distance of half a meter from the building and proceeded to impact the forks against the wall. However, there was no sign of movement and no cracks were noted. Only on the second attempt at the top brick course of the building did I manage to dislodge some bricks. I could not continue using the fork lift for fear of damaging it, and I opted for an air-driven breaker which still took a long time to eventually demolish the building.

”

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THB/39279/AH

So when homes are being developed to meet South Africans’ dreams, we have the finance to make it a reality. CALL US ON 031 560 5356 / 011 745 5011 / 021 514 8006 to discuss the home finance requirements in your development. www.sahomeloans.com Terms and Conditions apply. Please refer to our website for further details. SA Home Loans is a Registered Credit Provider. Registration Number NCRCP1735.

HOME BUYING

Home buying & property values The usual motivation when you buy your first home is to acquire your own property, rather than paying someone else's bond -- and of course you then have your independence.

ost youngsters seek freedom from living at home and having to abide by family household rules. The ‘millennials’ in particular (those in the age group under 30), find that this is normally the time that their financial awareness starts, and an investment in property is what they should consider. A wise investment at this age could set them up for life. Craig Hutchison, CEO of Engel & Völkers Southern Africa, comments: “The very idea of buying their own home is exciting, and they often do not realise what a wonderful investment they are making. This is the start of their financial independence.”

WHY IS INVESTING IN PROPERTY NOW THE BEST WAY TO GO? According to the FNB House Price Index, the average house price for April 2015 rose 5.0% year-on-year. Despite the nominal house price inflation slowdown, however, recent months' house prices continue to grow positively in real terms, when adjusted for CPI inflation. Due to the slower house price growth, opportunities are created for the lower income buyers as the prices stay achievable. Property remains an excellent investment channel. Therefore, now is a good time to buy, especially after the recent decision by the SA Reserve Bank to raise the transfer duty thresholds on property transactions – costs on transactions below R2,25 million have actually been reduced.

BUYING OPTIONS There are different options for buyers to consider when looking at a property purchase, either in a buy-to-let

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Photograph by Nerissa Dela Cruz - MyProperty.ph

scenario or as a primary residence. Both scenarios create different opportunities. A rental property producing a good yield (as an income-generating property) will bring in the necessary monthly rental, which, if managed wisely, can generate enough profit to buy an additional property to rent out. This process can be repeated until the investor has a portfolio of rental properties paying for themselves. Buyers could also choose to stay in a rental property costing less per month than their own home (which they would then rent out). This could very likely result in a saving from the rental income should their rent be lower than their monthly home bond payments. There is constant growth in the requirement for accommodation, so a sound property investment will be a guaranteed asset forever, and possibly the start of their property portfolio.

HOME BUYING

A GOOD CREDIT RECORD The financial leveraging emphasises how important it is to keep one’s credit history untarnished. When you apply for a home loan, your history regarding your personal instalment payments, leasing finance, mortgage loans, credit card debt, overdrafts and general loans are all considered. Consumers' credit-risk profiles impact their access to credit.

WHICH FACTORS INFLUENCE PROPERTY VALUES? According to ABSA's Housing Review for the second quarter of 2015, “The residential property market will always be driven by economic trends, household finances and consumer confidence, which will affect the affordability of housing and the accessibility of and demand for mortgage finance.” This means that property prices will invariably change with inflation over the years, particularly if the property is in an area or suburb that is sought after. Hutchison further advises that it is essential to research your area of choice properly before you invest in a home, and not to buy just because it appeals to you. He points to the following aspects to consider: The historic investment growth in an area, proximity to commercial offices, proposed new developments, schools, and also the general state of the neighbourhood. It is also a known fact that the more popular suburbs appreciate at a higher rate than the rest, so your investigation will highlight this fact. The annual appreciation of your property is therefore affected by the inflation rate, general demand, and also the infrastructure of the suburb. Together, these factors can ensure property appreciation of more than 15% per annum, which is much higher than any fixed deposit investment.

MAINTAINING YOUR HOME It is also important to maintain your home, although it feels like a neverending and ongoing evil. Money spent on maintenance should be budgeted for and properly planned. “Remember that when you eventually sell your home, a renovated and modernised home will always attract the current market value from buyers,” Hutchison concluded. Current macro-economic factors affect property prices, both up and down. Increased interest rates, fuel prices, and water and electricity costs always tighten household budgets, and owners may have to sell due to affordability. The irony here is that this creates opportunities for ‘cash flush’ buyers to invest in, and the affected sellers have to sell their properties and downscale to more affordable homes, or rent until the situation improves. Engel & Völkers has representative branches across South Africa. For more information, visit http://www.engelvoelkers.com/blog/2015/ property-value-increase/

www.pmsa.com C 2014

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LIFESTYLE DEVELOPMENT

Seaside living becomes affordable Set in a 2,450m2 wetland conservation area, and a stone’s throw away from the False Bay coastline, Dune Crest is Muizenberg’s answer to affordable housing. Photographs courtesy of Berri Swain.

he development is a joint venture between Asrin Property Developers and International Housing Solutions, offering first-time home buyers an opportunity to own a home starting at R589,000 for a twobedroom apartment, inclusive of transfer costs. Phase 1A that will offer 108 apartments is almost complete. “The first 108 apartments are nearing their ‘practical completion’ stage, with the final completion and handovers expected to begin from the end of August 2015,” says Shiraaz Hassan, Asrin’s Commercial Director.

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The construction teams have also paid close attention to logistics as it relates to all buyers experiencing a smooth moving-in process. “The developers have planned all construction activity, so as to limit the disturbance to those who move in while the remainder of Phase 1 is being built,” says Shiraz Onia, Asrin’s Construction Director. Onia continues, “And those moving into the first completed apartments will already benefit from the full security of the boundary walls and controlled entrance and exit point. In addition, the swimming pool and other amenities within the complex will be completed in time for the first handovers as scheduled.”

LIFESTYLE DEVELOPMENT

The lifestyle development is nestled in a 2,450m² wetland conservation area, and great care has been taken to preserve the wetlands. Says Hassan, “This green area has created a softer, more inviting look to the overall development. The full rehabilitation of the dune area, with a comprehensive maintenance management plan, has also begun – in addition to the full landscaping of the development as a whole.” Of the 108 apartments in Phase 1A, 70 have been sold, with a full sell-out anticipated by the end of 2015. Upon full completion, Dune Crest will comprise of 294 apartments that span across oneand two-bedroom styles. Apartments in this phase were launched between R399,900 for a onebedroom apartment and R575,990 for a twobedroom apartment – all inclusive of transfer costs.

Dune Crest, International Housing Solutions and Asrin Property Developers' affordable housing development in Muizenberg, where the show flat is complete and 108 apartments in Phase 1A are nearing completion. Photograph from Asrin Property Development. JULY - AUGUST 2015

LIFESTYLE DEVELOPMENT

The development is ideally for buyers within the R18,500 (approximately) joint income bracket to enable them to secure mortgage finance. On average, the monthly instalment for a two-bedroom apartment of this nature would cost the borrower an estimated R5,400 per month, if they procure 100% finance to be paid over a 20-year mortgage term. “This creates an opportunity for the first-time home buyer to purchase a home, as opposed to renting, as the bond repayments on the home prices would be in line with their rental each month,” says Hassan. When asked about the demand for rental in the area, Hassan says, “Our agents have reported a strong demand in residential rental property within the R6,000 per month price bracket and, as a result, many rental applicants who have been waitlisted on their books are being converted into buyers.” The development also offers other conveniences such as being within walking distance to the bustling Surfers Corner and Capricorn Shopping Centre and Business Park. “Purchasers at Dune Crest will benefit from the green environment and the trendy finishes for homes in this price bracket. Residents here are sure to see steady growth, as well as continuous enjoyment, of the lifestyle it offers,” says Hassan. For more information, visit www.dunecrestestate.co.za.

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COVER STORY

Hydraform technology delivers solid support to Eastern Cape housing delivery The Hydraform building system afforded the Radway Green Farm community, located just outside the town of Grahamstown, the opportunity to participate in the construction of their 27 affordable homes. The housing project was undertaken on behalf of the Department of Rural Development and Land Reform.

he project is part of an initiative to provide quality, affordable housing for the community of Radway Green Farm in the Eastern Cape, whilst also creating employment opportunities for its members for the duration of the project.

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As an unfortunate result of displacement, the community found itself housed in temporary shelters. The Department of Rural Development and Land Reform, in its commitment to development and upliftment, wanted to provide the community with permanent shelter while providing as much benefit to its members as possible.

COVER STORY

PEOPLE AT THE CENTRE Hydraform has gone beyond manufacture and supply and has added even more value to the community by involving them in the process of building their own homes. By employing 30 members of the local community in the manufacture of the bricks and blocks as well as the construction of the 27 houses, Hydraform has helped the community to benefit from an income for the duration of the build and has also imparted invaluable transferable skills to its members.

The community produced 150 000 blocks that went into building their homes using Hydraform’s interlocking block-making technology that compresses soil containing a small amount of clay and silt mixed with cement into soil cement blocks.

Nazlie Dickson, Sales and Marketing Director for Hydraform, notes, “The community members we employed for this project previously had no transferable skills other than farming. Now they have the ability to produce blocks and build using Hydraform’s interlocking building technology,” adding, “A key objective of the project was to ensure that the community members were not only beneficiaries of homes, but that they were trained in block-making and construction as part of their skills development. The community produced 150 000 blocks that went into building their houses.” Hydraform has been selling interlocking block-making machines for the last 27 years, so the company’s core focus is in the delivery of its technology along with training and skills development of communities in the Hydraform technology. Hydraform is now extending its client offering to deliver a turnkey solution that provides for specialised housing delivery. Says Dickson, “The opportunity this project gave us was to implement our own project and prove that a community can be transformed and enabled by participating in local construction in a short period of time and enjoy benefits beyond housing delivery.” Hydraform’s participation in this project, in providing their machinery to manufacture blocks on site, has proven of great value to the community. The quality of the site-manufactured blocks is of a high standard and they go a long way towards building quality homes that will serve their inhabitants well over a lifetime. Quality building materials with good workmanship combine for quality housing, which is proven to solidify a community’s pride and dignity in where they live.

A GREENER ALTERNATIVE This particular project offered a unique situation to test out the versatility and robust nature of Hydraform’s machinery. Notes Dickson, “The project itself is in a rural setting where there are no formal water and power facilities or supply. But this made no difference to the performance of our machinery, which is highly mobile and can produce blocks on site.” Community members employed in block production.

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COVER STORY

Transition from steel temporary shelters (white structures) to permanent quality homes built using Hydraform technology. Just as it innovatively provides solutions to possible challenges of locality and logistics, it also elegantly side steps the energy efficiency challenges that come with traditional brick and block-making. “Hydraform blocks are not baked or fired, which saves a remarkable amount of energy. The dry-stack interlocking technology also saves construction time and cement costs as well as providing materials with less embodied energy, contributing to a structure that is greener overall. This project is a selfsustainable and independent development that included solar power generation, a waste management system as well as water delivery.”

HOW HYDRAFORM’S INTERLOCKING BLOCKMAKING TECHNOLOGY WORKS Hydraform’s interlocking block-making technology compresses soil that contains a small amount of clay and silt mixed with cement into soil cement blocks. When cured, the blocks can be dry-stacked without the use of mortar. The final product is soil cement interlocking blocks that lock front, back, top and bottom, so that each block is dry-stacked and locked into place. The system uses mortar in the first few courses and again in the top 3-4 courses and the balance of the super-structure is dry-stacked, which means significant time and construction cost savings. “Our machines are ideal for remote sites where transport, cement and sand costs are prohibitively high. They also offer an eco-friendly, cost-saving alternative to conventional brick and block machines and are available in diesel or electrical options,” says Dickson.

TECHNOLOGY THAT OFFERS A MEANINGFUL CONTRIBUTION The Radway Green project began in March 2015 and will be completed on time and within budget by July 2015.

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While the project houses a number of families with the dignity they deserve, it also stands testament to Hydraform’s superb project management skills and unique technologies suited to the South African construction market. Remarks Dickson, “We were able to show that Hydraform technology can be employed by a local community allowing them the full benefit of participating in project development while learning new and invaluable skills and, in turn, improving their living standards. Projects like this prove that we are able to adapt to market needs, and in this case, the affordable housing market, by providing specialised and dynamic turnkey housing delivery options. This extended offering means we make meaningful contributions to South Africa’s job creation, skills development and community upliftment objectives.” Hydraform’s product offering is uniquely positioned to serve developing countries in their quest for infrastructure development and stability due to its inherent adaptability. “Our products are able to work around infrastructural constraints and still deliver housing, public buildings, clinics and schools – even in the most remote areas,” concludes Dickson.

ABOUT HYDRAFORM Hydraform has dedicated its more than 25 years of experience in alternative building technologies to developing the Hydraform interlocking building system. Through continuous research and development with leading institutions, the company has developed a dry-stack interlocking building block, eliminating the use of mortar in 70% of the building structure with no need for concrete or steel columns – saving money and delivering exceptional quality.

For more information, visit www.hydraform.com.

FINANCE & INVESTMENT

GPF solves funding impediments The Gauteng Partnership Fund (GPF) is a trust established in 2002 by the then Gauteng Department of Housing. Its initial aim was to stimulate the social housing market with a focus on rental housing in Gauteng.

n 2008 this mandate was expanded by the board of directors and provincial government to enable the GPF to operate across the entire affordable housing value chain, with a renewed goal to facilitate, catalyse, secure and optimise investment in the affordable housing market in Gauteng, and ultimately fast-track the provision of housing.

STRATEGIC COLLABORATION The GPF aims to achieve this by leveraging strategic partnerships with stakeholders and businesses seeking to develop affordable residential properties for rental that caters to households with an income of up to R18 000. Their vision to be the partner of choice in affordable housing delivery in Gauteng using innovative financial investment opportunities, places the GPF in an esteemed positioned to: • Mobilise new and innovative funding streams for projects • Leverage private and public sector finance to ensure better project bankability • Facilitate collaboration between public and private sector partners • Promote accountability, monitoring and efficiency in the implementation of projects, thereby enabling coordinated effort by both the public and private sector in sustainable integrated human settlements delivery

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PARTNERING FOR SUCCESS At a glance, the GPF has a specific mandate to cultivate partnerships to address funding blockages within the sustainable human settlements market. In accordance with the Sustainable Human Settlements Policy Framework, it is required to facilitate investment capital flows into integrated developments, whilst supporting equitable risk-sharing project financing. Through the use of innovative funding interventions, as mechanisms to attract capital market investment, it participates in the successful implementation of affordable housing projects.

THE GPF OFFERS A RANGE OF FUNDING OPPORTUNITIES THAT INCLUDE: • Rental Housing Fund • Emerging Entrepreneur Empowerment Property Fund • Social Housing Fund • Student Accommodation Fund • Pension Backed Homeloan Facility • Management of social housing institutional subsidies • Strategic partnership projects (banks and development finance institutions) • Facilitation of rental capital into integrated housing developments

FOR MORE INFORMATION CONTACT: (t) 011 685 6600 (e) info@gpf.org.za (w) www.gpf.org.za

THINKING OF INVESTING IN AFFORDABLE RENTAL HOUSING IN GAUTENG?

CONSTRAINED BY FUNDING CHALLENGES? The Solution - The Gauteng Partnership Fund (GPF) is the ideal partner for companies seeking to develop affordable residential properties for rental to cater for households with income up to R18000. Who Are We - Mandated by the Gauteng Department of Human Settlements to accelerate the provision of human settlements, the GPF has leveraged over R2.2 billion in private sector funding for developers and investors in the affordable housing market. The GPF seeks to share ďŹ nancing risks with debt funders and developers for affordable housing projects. Opportunity exists - To access GPF funding that aims to assist rental housing developers by leveraging private sector funding into affordable housing rental market. The GPF funding enhances the bankability of projects to enable senior lenders to ďŹ nance on favourable terms. Please quote reference number 0029 when speaking to a GPF representative.

For more information or to apply for funding contact Phetsile or Maki: Tel: 011 685 6600 or Email: info@gpf.org.za Web: www.gpf.org.za

CONCRETE SLABS

Poor soil conditions and tricky site no problem for ESA’s slabs Difficult soil conditions and an environmentally sensitive site have presented tricky challenges for the design and construction team working on Country Life Estate -- a new retirement estate currently under construction in Benoni, Gauteng. The use of hollow core precast concrete slabs manufactured by Elematic South Africa (ESA) has made a difference in both respects.

nitial geotechnical surveys did not reveal the high water table and challenging soil conditions on site. It was only after taking occupation of the site, to begin work, that the construction team discovered that straightforward strip foundations and cast-in-situ floor slabs would not be an option. A new engineer was quickly appointed on the job and the design revised – this time to include piled foundations and suspended ground beams for all 300 free-standing units and the service centre with its 200 apartments and frail care unit.

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ESA, which specialises in manufacturing precast hollowcore concrete slabs, is supplying a substantial quantity of the slabs that are being used to construct the suspended ground floor slabs in all structures, and almost all of the suspended slabs in the service centre. The slabs, which are manufactured at ESA’s newly-expanded factory not far from the site, are able to be delivered and installed quickly and easily – saving the construction team time that would normally be required for curing in a cast-in-situ scenario.

CONCRETE SLABS

Driks van der Westhuizen, construction managing consultant for Central Developments (which is developing and building Country Life Estate), says that the discovery of the difficult soil conditions threatened to derail the construction programme and dramatically increase costs. Having worked with ESA on previous projects, he knew that the quality of the slabs, the speed of delivery and installation and the ease of communication with ESA’s team would all ease the process.

ESA SLABS: SITE-READY AND ENVIRONMENTALLY FRIENDLY In addition to these benefits, using a product that is manufactured off site has had further importance with regard to easing some of the difficulties associated with working on an ecologically sensitive site. Approximately half of the 26ha site consists of a wetland. The Department of Environmental Affairs has strict regulations aimed at minimising the impact of construction activities on the site. Benoni is known to be home to some unique fauna and flora – a site just a few kilometres down the road is one of only three known breeding sites for the African bullfrog. “We are keeping large, heavy vehicles off the site (resulting in a lot of double handling of materials) and limiting the mixing of concrete and mortar, which may not be mixed on the soil,” explains van der Westhuizen. In this respect, using ESA’s slabs has also been beneficial since the products arrive on site ready to be installed with the minimum of complications.

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ESA doubled its manufacturing capacity with a massive expansion at its ISO-certified factory. “This expanded capacity has meant that we have been able to meet Central Developments’ demand on site without complications and delays,” says ESA’s director, Craig Webber. He is pleased that ESA’s slabs are helping his client to keep construction on track, and that they have provided a simple solution for helping to meet the environmental requirements, too. Construction is progressing well, with Phase One having opened on 1 July 2015 and the remainder of the construction phases looking to be ready on, or close to the original completion dates.

WOMEN IN CONSTRUCTION

Building a prosperous future Award-winning entrepreneur Sibongile Manganyi-Rath started Indigo Kulani nine years ago with a clear vision and purpose. Today, Indigo Kulani stands as one of South Africa’s top-performing women-owned businesses in the tough built environment.

rom humble beginnings in 2006 Sibongile ManganyiRath ventured into the challenging built environment using the entrepreneurial skills she acquired working with her father in his fruit stall as a young girl. Led by a clear vision and purpose for the business, she has propelled the group to substantial growth and entrepreneurial empowerment. Says Manganyi-Rath, “I realised that we have entrepreneurs in our country but that the business environment is so hostile the people are unable to achieve their dreams. I don’t believe in micro-managing people because I believe that when people are micro-managed it hinders their growth and, ultimately, the growth of the company.” When asked about her thoughts on being a woman positioned in a male-dominated environment, she notes, “Being a female-owned young company in a male dominated industry poses its own unique challenges, such as clients and suppliers being unsure of your capabilities, but to overcome this, Indigo had continually strived to raise the bar and make their mark as a strong contender in the industry. To do this, however, has required a solid foundation.”

LOOKING AHEAD As a young girl catching the train from Soweto to Bedfordview, Manganyi-Rath was intrigued by the buildings she saw being constructed, through the train window, but specifically the male-only construction meetings taking place at these various sites. Not one to shy away from challenges, she adds, “I just saw men in hard hats and I thought it would be interesting to do what they were doing. I started to research the construction industry and the more I did, the more I realised that it was a challenge that I wanted to take on. I kept asking myself: Why can’t I do it? Why can’t we change things?” It was this thought process that steered her course into the construction industry, and it is still the methodology she applies in her business today.

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Commenting on the business model that she pioneered in her organisation, that sees each company run by a unit leader under a single vision, she says, “A lot of entrepreneurs believe that if you want something done that you have to do it yourself. The problem with that is that you can’t grow with that approach because you can only do so much yourself. I came into the infrastructure and property sector through my studies as an architect but, because I am an entrepreneur at heart, I am always searching for knowledge and understanding of how we can better service our clients.”

WOMEN IN CONSTRUCTION

Through this approach, Manganyi-Rath was able to expand Indigo Kulani as a multi-disciplinary group with a focus on infrastructure consulting – a truly noteworthy achievement. This strategic direction affords her clients a single entry into a broad array of services at any specific project juncture, thereby offering substantial cost reductions.

UNOBSTRUCTED PURPOSE When asked about the vision and mission of Indigo Kulani, Manganyi-Rath is confident, noting, “From the beginning I was very clear that I wanted to build a generational organisation, one that serves people and redefines the infrastructure delivery landscape. She adds, “Once the vision was clear, it was important to define the key principles about what our core beliefs were. In the case of the Indigo Kulani Group, we stand on the key principles of professionalism and integrity. These two principles are priceless and have been the fundamental backbone of our company. If I make a commitment to my clients, and I go and market ourselves and we get a job, and I say, ‘this is what we offer,’ then I shouldn’t give them something different from that.”

SAILING THROUGH THE CHALLENGES Although the group’s client base spans across government, corporates as it relates to mining, retail and often private residential projects, it requires hard work, commitment and a strong set of values to negotiate some of the industry’s challenges. The group does however derive distinct benefits from its varied client portfolio, one of which is diversified income streams that counter seasonal opportunities in the market. Manganyi-Rath says, “It was through this strategy that we were able to sail through the recession, and in fact continued to grow.” Manganyi-Rath does caution, “Business is not about you… it’s about building a legacy, building a vision.”

FOUNDATIONS OF BUSINESS Manganyi-Rath holds education very dear to her heart and has as such established the Indigo Kulani Foundation. “I know the power that education carries. My parents didn’t have a formal education but they encouraged me to go to school, and then my life changed for the better. I believe that education creates an opportunity and a passport to dreams being realised. If we want to correct matters and drive our nation towards a brighter future, it is important to use the same tool to take our country forward by investing in the education of children.” She concludes, “If you are building a legacy you need to understand that it's not going to be a microwave process, but when you are committed to something, you will see it grow.” For more information, visit www.indigo-group.co.za.

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FINANCE

Doing things differently -- and getting more South Africans into homes While the changing financial climate in South Africa has, from time to time, impacted both negatively and positively on the property market, the need for housing and home finance has continued unabated in the affordable housing segment.

n fact, the demand for affordable housing currently exceeds supply, with potential first-time homeowners aspiring to get onto the property ladder both for its investment value, and more importantly, as a statement of independence and personal achievement. The needs and dreams of this segment represent an opportunity for home loan lenders to address this market specifically and consider the specific needs of the firsttime buyer. This has been identified as a key issue in the home loans market by SA Home Loans, South Africa’s biggest non-bank home loan provider. Founded over 15 years ago to challenge the established home loan providers, SA Home Loans has always adopted a very different approach to home finance. Specializing in home loans only, they are aware of the very personal journey home ownership represents to their clients – both from a financial and an emotional perspective. According to Zakheni Dlamini, Director of Affordable Housing at SA Home Loans, the company understands that buying a home is not only the biggest financial transaction most people will ever make, but it is also one of the most daunting. “We don’t ever want our clients or potential clients to feel overwhelmed or uncertain about the home loan process. We make them feel that they are valued, and not just a number. We make sure we understand our clients’ needs, guide them through the process and keep them informed at all times. We provide them with far more than just finance. This works for us and for them,” says Dlamini. In an effort to make home ownership possible for more South Africans, SA Home Loans now offers 100% bonds to potential home owners who earn a joint monthly household income of R8000 or more, putting the dream of owning a secure home for their families within the reach

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of many more people. Adds Dlamini, “We know that having a place of their own is a top priority for most South Africans. Our research has indicated that home ownership is considered almost a rite of passage and having one’s own private space is liberating, providing a huge sense of achievement.” While home ownership may have seemed an impossible Zakheni Dlamini, Director dream for many, initiatives of Affordable Housing at from home loan providers SA Home Loans like SA Home Loans brings this opportunity closer. Dlamini believes that the unique personalized service and specialized skills SA Home Loans offers is exactly what first-time homeowners require. “While SA Home Loans is committed to providing accessible home finance, we are also committed to making the home loan process as fast, simple and stress-free as possible. Our consultants are dedicated to making sure every home loan application gets the thorough attention it deserves so it has the best chance of approval,” notes Dlamini. This personal attention often involves sound financial and credit guidance as well as coaching of potential homeowners to prepare them for the commitment of home ownership and finance. “We plan to work closely with more property developers in this market, and jointly empower first-time homeowners to fulfill their property aspirations,” concludes Dlamini. SA Home Loans is a Registered Credit Provider with branches across South Africa. Visit www.sahomeloans.com.

SHAPING THE FUTURE OF INFRASTRUCTURE DEVELOPMENT Indigo Kulani Group is an integrated multi-disciplinary infrastructure and property development holding company. The company was established in 2006 and initially specialised in the provision of planning and design services within the construction industry. Over the past few years we have rapidly grown from strength to strength into the formidable multi-disciplinary infrastructure and property development company that it is today. We pride ourselves through all our award-winning achievements. We have an operational presence in all nine of South Africa’s provinces and have expanded our operations to other African countries. These include projects in Tanzania, Angola, Nigeria, Ghana and Lesotho.

• Architects • Engineers • Property Development • Quantity Surveyors • Project Management • Management Consulting • Project Finance • Asset Management • Facilities Management • Mining • Energy

www.indigo-group.co.za Tel: 086 111 2221 Fax: 086 690 6963 info@indigo-group.co.za

CEMENT & CONCRETE

New insurance for SARMA protects suppliers against faulty concrete A specialist indemnity insurance policy has recently been introduced to insure readymix concrete suppliers against claims arising by clients or third parties in the event of concrete failures.

emoving and replacing concrete that has already cured or partially cured is a risk facing any concrete supplier who, through one mistake, may lose millions of Rands or even their business depending on the size of the pour and resilience of the company. In a progressive move to protect both the customer and readymix supplier, the Southern Africa Readymix Association (SARMA), has recently worked with insurance role players to provide specialist indemnity insurance that provides both parties with peace of mind in the event of concrete failure. The policy is only available to SARMA members and is offered by construction insurance specialists, CivilSure.

work. The policy will pay out up to R10-million in the event that the professional member of SARMA undertook their duties in accordance with the prescribed best practices as outlined by SARMA. Claims for injury or damage will also be covered and additional extensions may be made to cover the readymix plant’s actual equipment against breakdowns, as well as certain legal defences and consequential loss, etc.” says CivilSure’s Dan Payton.

EXTRA COVER

UNFORESEEN FAILURES Although concrete failures can occur as a result of unforeseen circumstances, underwriters of the policy are satisfied that strict quality standards applied to SARMA members (which are audited annually) and the generally high standard of SARMA compliance are sufficient reasons to provide this type of insurance to SARMA members only. “If, for example, a person orders concrete suitable for building a swimming pool, but when it cures is found to be unsuitable, then the insurance will kick in and pay for the repair or removal of the failed concrete and pay for the replacement of a new structure if required. The policy therefore provides recourse for the user, who will have their pool structure repaired or replaced, as well as providing the supplier with a means of guaranteeing their

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Says Johan van Wyk, SARMA General Manager, “Additional fleet insurance packages are also being made available to SARMA members. These are specialised readymix concrete related insurance products that are made possible through the high standards upheld by SARMA members, as well as economies of scale as a result of SARMA’s large membership. This type of cover has been very difficult to obtain and not affordable; however, the insurance company has seen that the codes of conduct of SARMA warrant that this cover can be provided at a reasonable premium due.”

Dan Payton, CEO of CivilSure, niche risk adviser to the Civil & Construction Industry.

He concludes that the insurance policies should provide suppliers and buyers alike with peace of mind to know that they are covered in the event of something going wrong between the stages of procurement, delivery and curing of the concrete. It is another reason why users should specify concrete only from SARMA-accredited members. For more information, visit www.sarma.co.za.

GAUTENG GOVERNMENT SERVICE

Gauteng government cuts supplier invoice submissions to mere days On June 22, Gauteng Finance MEC Ms Barbara Creecy launched an electronic invoicing service, targeting government suppliers, that cuts invoice submission time to provincial government departments from 60 days to less than two days.

uppliers can now submit invoices through an online service that’s available to anyone with Internet access. During the course of this year, 24 Thusong Centres across the province will be connected to the service to ensure those who do not have private electronic access are not excluded. At the launch of the e-invoicing system that took place at Maponya Mall Thusong Centre, MEC Creecy said the pilot of the system, which has been running since November 2014, has successfully migrated a sample of small and large companies onto the new system. “As you know, we have been working for some time to reach the target of paying suppliers within 30 days,” said MEC Creecy. “A study by the Treasury found it can take up to 60 days for invoices to reach the relevant department for processing. With the new system, suppliers can submit any time, 24 hours a day, seven days a week,” she said.

SA Patent no. ZA2011/01062

Giuseppe Dalla Torre +27 (0) 83 305 5191 gadallatorre@telkomsa.net

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Provincial Treasury extended an invitation to all registered government suppliers to attend the Electronic Invoicing Services Supplier Information and On-boarding Sessions held at its offices at 75 Fox Street. Currently 357 suppliers are in the process of being uploaded. Service providers on the pilot say it removes the need to phone officials, as they can personally and at their convenience, track the progress of their invoices. This makes a huge difference to the cash flow of small and medium suppliers,” MEC Creecy said. MEC Creecy also announced that the Thusong Centre at Maponya Mall has been migrated onto the fibre optic Gauteng Broadband Network (GBN). The speed and size of the network will enable a new generation of e-government services to run on the network. All provincial government departments will be migrated to GBN by the end of December this year. “The Gauteng Broadband Network brings about a faster and stable network that will be the backbone for providing new and improved online services for the public. Some of the services include e-invoicing and later on will allow service providers to register on our supplier database and participate in the tender system, without needing to physically lodge documents in our offices,” MEC Creecy added. This network is part of the modernisation of the Gauteng public service and ensuring that the province keeps up with the pace of technology improvements. This is also part of the national pilot on broadband connectivity. The Gauteng Finance Department allocated R250-million last year for the building of the network and expectations were that the MEC of Finance would announce another R250-million allocation in this financial year.

WOMEN IN CONSTRUCTION

NHBRC lays firm foundation for female entrepreneurs in the construction industry According to Stats SA’s year-on-year figures (April 2014), the construction sector employs over one million people, of which only 10% are women. The NHBRC Women Empowerment Programme seeks to address this under representation in this sector.

outh Africa’s construction sector is driven predominantly by the government’s infrastructure spend alongside the pressing need to successfully implement the National Development Plan. The sector contributed 4% to the country’s nominal Gross Domestic Product (GDP) – that’s over R34 billion in the first quarter of 2015 alone.

CONSTRUCTING A BRIGHTER FUTURE The NHBRC Women Empowerment Programme was established with the Gordon Institute of Business Science in support of the emerging entrepreneurship base in South Africa and to commemorate 20 years of democracy. The Programme invests in emerging female entrepreneurs in the construction industry, with a view to increase the percentage of participation by women in an employee or employer capacity. Each year delegates are selected from across South Africa to participate in a four-month academic programme that will teach them to cultivate leadership and business skills.

BUILDING A LASTING BUSINESS The Programme features a structured component that includes topics such as: • Entrepreneurship and Innovation • Business Models and Strategy Development • Financial Management • Marketing • Negotiations Skills • Operations Management • Taxation, Legal and Compliance • Networking, Communications and Presentation Skills • Leadership, Personal Mastery

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Participants will also be privy to ongoing networking with government and key stakeholders in the construction sector, as well as significant mentorship support. For the duration of the Programme, each participant will be trained by leading academics in the housing and finance sectors respectively, be given the opportunity to engage in active dialogue with sector experts, and will be trained to develop comprehensive business plans. The Programme received top honours at the 2015 Women in Construction Awards where it was recognised as the “Most Innovative Training Programme”. Says NHBRC Chief Executive Officer, Mongezi Mnyani, “We are very honoured by this award. Recognition by the industry tells us that we are being effective in our efforts to change the way women are represented in the construction industry.” A multitude of opportunities exist for women to become players in the construction section and with 100 women enrolled in the Programme to date, it is certainly indicative that there’s an interest by women to participate meaningfully in this sector. For more information, visit www.nhbrc.org.za.

Conference

∙ Trade Expo

12 – 13 August 2015, Cape Town International Convention Centre

Conference

∙ Trade Expo

R SPONSO a s a e t a and Particip and exp R O T I B or EXHI twork! e n s s e sin your bu CapeConstructionExpo

CT_Construction

HOST MEDIA PARTNERS

Cape Construction CONTACT TANITHA JOlly

tanitha.jolly@cape-construction.co.za +27 21 700 4324

www.cape-construction.co.za

MACHINERY

PMSA launches its latest innovative technology at Totally Concrete 2015 Pan Mixers South Africa (PMSA) launched the Fiori DBX35 self-loading concrete mixer and the new SPS range of roof tile machinery at Totally Concrete 2015.

Left to right - HTC concrete floor polishing equipment, an ABECE roof tile extruder and a Fiori DBX35 self-loading concrete mixer.

he SPS semi-automatic extruder can manufacture up to 5,000 concrete tiles in a nine-hour shift, which equates to approximately 10 tiles per minute, depending on the specific plant configuration. The primary benefits of the SPS range of roof tile equipment are that it is easy to install, operate and maintain, which are important considerations in remote project sites in Africa. Ever mindful of the requirements of its customers to improve quality and reduce costs, the Fiori DBX35 addresses a need in the local market for an affordable and reliable self-loading concrete mixer. One of the substantive benefits of the Fiori DBX35 self-loading concrete mixer is that it offers accurate measurement without the need for additional equipment.

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“It is the ideal self-loading mixer for the price-conscious customer, and therefore I am confident it will be a notable success across sub-Saharan Africa,” comments Quintin Booysen, marketing and sales manager at PMSA. “The extensive product range we had on display at Totally Concrete 2015 was a clear demonstration of our flexibility in being able to respond proactively to specific customer requirements, as well as providing robust and userfriendly equipment that can withstand the harsh operating conditions in Africa,” Booysen concludes. For more information, visit www.pmsa.com.

FREE EXPO AND WORKSHOP PASS

Conference

Valued at R200

∙ Trade Expo

12 – 13 August 2015

Cape Town International Convention Centre Conference

∙ Trade Expo

WHY ATTEND THE EVENT?

If you manufacture, sell, specify or work with construction in any capacity then this is your show!

• Develop your skills during FREE workshops and training on the exhibition floor • Meet the entire construction value chain • WIN! Lucky draw prizes to be won Networking opportunities

EXPO HOURS Conference Trade Expo

Tuesday 12 August 2015 11:00 – 18:00

*VIP CODE: SAAH01

Wednesday 13 August 2015 10:30 – 16:00

NETWORKINg INVITATION

SEE, TOUCH AND EXPLORE the

Date: Wednesday 12 August 2015

solutions of tomorrow from 100+ exhibitors who will be displaying: Chemicals and admixtures Consultants Contracting services Construction tools and equipment Finance and insurance Finishing and facing materials Flooring Formwork and scaffolding HVAC Landscaping products and services

Conference Trade Expo

Time: 17:00 - 19:30 Dress: Business casual

Paints and coatings Retailers Roofing Safety and security Sealants and insulation Software and IT Specialist contractors Transport and logistics

HOW TO REgISTER Get your free ticket by visiting easycode. com/ccreg And use the *VALIDATION CODE on the TOP to redeem this voucher and enjoy free entry

ADDRESS Exhibition Hall 1 & 2, Ground floor Cape Town International Convention Centre, Cape Town

WHAT TO EXPECT? 3000+ visitors

100+

exhibiting companies

20+

participating partners

FREE workshops CapeConstructionExpo

@CT_Construction #capeconstruction2015

Cape Construction

Association and strategic partners

meghan.gilson@hypenica.com

www.cape-construction.co.za

BATHROOMS

Cozyrail bathroom accessories

- a perfect fit for affordable housing A new range of bathroom accessories has been introduced to the market by Stainsteel Products under its Cozyrail brand name. These are manufactured at the companyâ&#x20AC;&#x2122;s production facility in West Turffontein, Johannesburg.

andcrafted from 304 grade stainless steel and polished to a mirror finish, these items are fashionable, extremely robust, long-lasting and represent excellent value and quality. In addition, they are highly suitable for all types of affordable housing projects where a standardization of products over an entire project is required. Stainsteel Products also plans to launch a range of stainless steel DIY hand railings and balustrading in the near future to complement its existing product range. These will also represent an excellent investment for affordable housing developers in terms of value and quality.

Constructors, builders, property developers and architects can all access these products directly from the factory at attractive prices and in so doing will support local manufacturing.

ABOUT STAINSTEEL PRODUCTS Stainsteel Products has been a manufacturer of stainless steel heated towel rails for the export market since 2002 and employs a staff of 14, most of whom have been with the company since its inception. The company also produces a range of stainless steel grab rails for use in bath and shower environments. For more information, visit www.cozyrail.co.za.

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RENTAL HOUSING

Affordable housing in high demand Demand for affordable housing for South Africa’s low and middle income earners is superseding supply, with industry experts predicting that this asset class will yield excellent growth potential.

outh Africa is experiencing a shortage of affordable, entry-level housing within its urban areas, with supply anticipated to take several years before it catches up with demand. Ryan Wintle of Construct Capital, specialists in providing development management services and funding solutions, recently commented, “This is an asset class within the property market which investors have typically been reticent to invest in, leading to widening the supply and demand gap.” In response to this shortage, Construct Capital is converting old, economically unviable commercial buildings into low-cost residential accommodation in Germiston, Randburg, the Johannesburg CBD, and Durban’s Point area. The average rentals range from R3,000 for bachelor units to R5,500 for threebedroom units. “Factors contributing to driving this demand include urbanisation, as rural South Africans move to bigger centres in search of work and a better life, as well as the cost of transport and more efficient travel times,” Wintle said. “As for all of us, time is money, and these properties are centralised and located in commercial areas. In some of these properties, it is even viable to have a crèche to make the lives of working parents easier,” he added. In order to make a market related return on rentals it is imperative to effectively manage the building costs of the conversion. However, it is equally important not to cut costs on items which can later result in significant increases in operational costs. “We use granite tops in our units as opposed to melamine which deteriorate quickly if tenants put hot items on the surface,” Wintle explained. When asked about the challenges of this kind of accommodation, Wintle noted that there is a massive demand for affordable and safe residential accommodation, yet the traditional banks are cautious of funding these sorts of developments.

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Low-cost residential accommodation - Germiston area.

RENTAL HOUSING

“We feel that this is due to two main reasons. Firstly, the fact that the tenants can only be signed up once the development is complete means funding needs to be approved on a theoretical income stream. Secondly, these assets are tenanted by numerous short-term leases, as opposed to longer-term, stronger leases, which the banks currently perceive as riskier. This generally results in more equity being required to convert these projects,” he stated.

Living area.

Despite these barriers, private investors are allocating capital to these projects, which shows viable longterm potential. Wintle further added that this limits entry into this market to those who have significant cash. Yet even with the equity requirements, these projects are drawing many investors as a result of the good yields and a secure income stream. According to the TPN Credit Bureau, at the beginning of last year, 86% of residential tenants were recorded as being in good standing. Of this figure, 83% of tenants rented for under R7,000 per month. TPN’s Residential Rental Monitor for 2014 cited that the ‘sweet-spot’ for residential rentals was the R3,000 to R7,000 rental category. An astounding 61% of tenants are currently renting in this price bracket, and this has resulted in a consistently strong demand for properties. Wintle believes that operational control is of utmost importance in order to make these types of properties viable. The property managers need to provide a safe, clean environment for tenants, keep out bad influences and ensure rent is paid. “If this type of asset is managed properly, it can provide a bulletproof income stream for the investor. Access control is critical and managing non-paying tenants very quickly is key; therefore, management needs to be very active. It is more expensive to manage than other property classes; however, this type of investment does provide a good and consistent return,” he noted. Internationally, residential-focused property funds make up a large percentage of the listed property sector, but no such fund currently exists in South Africa. Recent reports in the media have indicated that a property loan stock company plans to list the first residential-only property fund on the JSE soon. “Previous residential listing attempts have been unsuccessful, and a major reason for this could be investor perceptions. However, these are changing. Construct Capital believes the time is at hand to see such a specialised residential fund listed and a new asset class created,” Wintle concluded. For more information, visit www.constructcapital.co.za.

Kitchen.

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LAW & REGULATIONS

Prompt payment regulations set to be game changer for the construction industry The Department of Public Works under the Construction Industry Development Board (cidb) has proposed the Prompt Payment Regulations and Adjudication Standard that is currently open for public comment until 29 July 2015. The draft regulations are set to profoundly change the operational landscape of the built environment by affording contractors and sub-contractors a platform to demand timely payment for work completed.

ith a view to address debilitating areas in the construction industry, so as to ensure effective infrastructure development, the cidb underwent extensive research to devise solutions to challenges such as chronically delayed payments across numerous state departments that often don’t have the appropriate processes in place to address compliance failure. Under the proposed regulations, practices such as the ‘pay-when-paid’ and the withholding of payment clauses make a case for the reasonable suspension of operations due to non-payment. Contractors and sub-contractors could also be entitled to charge interest on overdue payments, alongside being able to insist on regular payments within a set timeframe, or alternatively a stringent 30-day invoice cycle. The new regulatory system also introduces a mandatory form of adjudication as a mechanism for dispute resolution.

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The newly proposed regulations will govern payments, dispute management as it relates to construction works contracts with an overarching objective to legislate payment provisions, as well as utilise adjudication as a mandatory initial step for contractors across the public and private sectors. However, excluded from the application of this set of regulations are home building contracts, as contemplated by the Housing Consumer Protection Act 1998 (Act No. 95 of 1998). Fast fact: A cidb survey discovered that out of approximately 900 construction projects, 43% contractor invoices were paid more than 30 days post invoicing. For more information, visit www.cidb.org.za.

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