Civil Engineering Reference
In-Depth Information
the apartheid era; and much of the labour force has low skill levels. Significant
improvements have been made to infrastructure networks providing electricity,
running water and roads but much remains to be done, particularly in the areas
of housing, health and education. The government's usual line is that resources
are limited, but this has limited credibility when ministers are accused of spending
exorbitant sums from the public purse on cars and entertainment (Drew 2010).
The construction market in South Africa is currently worth an estimated
£16 billion, which represents about 9 per cent of GDP (within the expected range
for a developing economy). with infrastructure being the dominant sector. The key
areas of development include energy, telecommunications, transport, water and
sanitation, and these accounted for about half of the construction output generated
during the last decade. The South African government's 2011 budget has prioritised
expenditure on social infrastructure, and this means a greater focus on education
and health over the forthcoming decade.
Clearly public sector infrastructure projects are a major contributor to economic
growth and poverty reduction. However mismanagement and corruption during
planning, implementation and monitoring of construction projects undermines
the expected social and economic benefits. As a government report recently
acknowledged, there are strong indications that corruption in the South African
construction sector has increased rapidly, and is reaching a tipping point beyond
which it may be very difficult to reverse (CIDB 2012).
Fraud and corruption is a major problem, evidenced by bungs, bribes and
backhanders, particularly during poorly managed tender processes. This problem
is not unique to South Africa, and in many ways construction has acquired the
dubious honour of being the most corrupt industrial sector across the globe. As
Transparency International (2010: 76) acknowledged, in both developed and
developing countries, construction is consistently ranked as one of the most
corrupt sectors. In terms of the three countries profiled in these case studies, China
is ranked as more corrupt than Japan or South Africa. In fact according to the
corruption perceptions index (produced annually by Transparency International) of
178 countries around the world only Japan appears relatively clean; it is ranked at
position 17, three places above the United Kingdom.
A role for government
Governments have a central role to play in promoting change in the construction
industry. In the period dominated by Keynesian policy (1950-1975) governments
opted for direct intervention. Indeed, until the 1970s, 50 per cent of all construction
work was purchased by the public sector in the UK. From 1975 to 2010, however,
government policy has placed far greater reliance on laissez-faire market forces. This
has eroded the capacity of governments to directly control construction output.
Now following the near collapse of the banking system in Europe and the United
States, there is some reluctance to allow free markets to continue unchecked (see
Chapter 14
for details). So many governments today find themselves facing a
dilemma as they have policies to encourage environmental protection, promote
innovation, and set legal standards to support transparency and competition, but
