Assessing the support given by the SEDA Construction Incubator programme to emerging contractors involved in housing within the eThekwini Municipality, KwaZulu-Natal.

Abstract

This study assessed the support offered by the SEDA Construction Incubator (SCI) programme to emerging contractors involved in housing construction. Emerging contractors are black-owned small and medium construction enterprises. The housing process excluded such contractors during the apartheid era. This exclusion created a pool of underdeveloped black-owned companies. It is for this reason that the promotion of emerging contractors is a central theme of the current government’s housing policy. The South African government appoints these contractors, through a tender system, for the construction and maintenance of state-subsidised housing. However, these emerging contractors often fail to grow beyond basic levels of business operations. The SCI programme has been developed as a response to the challenges emerging contractors face. This study analysed the way support has been given to emerging contractors. The study analysed the discourse around the challenges hindering small and medium contractors in South African and internationally. It also looked at mentorship and training support programmes implemented locally. The study thereafter used qualitative research instruments to examine and analyse the challenges that contractors in SCI programme encounter and the extent to which the SCI programme’s support assisted contractors to mitigate their challenges. The study’s findings revealed that contractors’ main challenges were in respect of obtaining new construction projects and accessing finance. The challenge of winning projects compounded the challenge of accessing finance. Also, contractors did not maximise the benefits of the theoretical or mentorship support by the SCI programme because these forms of support were structured to assist contractors after they had won projects and begun the physical construction of the housing project. In addition to this, the findings revealed a difference between the support that the programme provided and the expectations of the emerging contractors, which resulted in contractors expecting project opportunities from the SCI programme. Many of these emerging contractors expected the SCI programme to offer them construction projects that they would implement while they were members of the programme but the programme only went as far as its mandate, which was to support contractors to win projects rather than arrange projects. The researcher recommends that the implementers of the SCI programme consult with potential SCI contractors prior to them entering the programme, to carefully set out the roles of all the stakeholders involved within the duration of the incubation. This would ensure that the expectations of contractors are managed. In addition to this, the researcher recommends that the SCI programme extends its mandate to support contractors to win projects. The researcher suggests that the SCI programme should also provide a platform to emerging contractors that will enable potential clients to interact with, negotiate and do business with these contractors.