The settlement agreement reached between the construction companies implicated in collusion and government can help to give effect to government’s vision of radical economic transformation.
This is according to a statement released by Cabinet on Thursday following a meeting held on Wednesday.
In terms of the agreement, the seven construction companies are to make financial contributions of R1.5 billion for developmental projects, in addition to the R1.4 billion in competition penalties previously imposed by the Competition Tribunal.
Cabinet has welcomed the settlement agreement reached between the construction industry and government, also known as the Voluntary Rebuilding Programme (VRP).
“This agreement sets company-level targets for transformation, either through the sale of a minimum of 40% of shares to black South Africans or through partnerships with smaller black-owned construction companies, to help increase their turnover to 25% of the listed company turnover, over a seven-year period,” the statement said.
The companies have paid their first sum of R117 million in terms of the settlement agreement they entered into with the National Revenue Fund.
“This is the most far-reaching sector agreement on transformation reached with government to date and can help to give effect to government’s vision of radical economic transformation. It is also a model that can be drawn on for transformation in other sectors.
“Cabinet congratulates the signatories to the agreement and urges all other construction companies in the sector, who are not currently party to the agreement, to follow this lead and join in the partnership that is being built, through making similar commitments in order to further boost the transformation of the sector,” the statement said.
Cabinet further welcomed President Jacob Zuma’s 2017 State of the Nation Address (SONA), which was held under the theme “Radical Transformation of the Economy”.
During his address, President Zuma outlined progress that government was making in realising its vision of a national democratic society and the key actions required to move the country closer and faster to a united, non-racial, non-sexist, democratic and prosperous society.
“SONA 2017 clearly demonstrated that consolidated efforts by government, business and labour in implementing the Nine-Point Plan are beginning to have an impact. Cabinet reiterates the President’s call to intensify efforts aimed at driving radical economic transformation and efforts to fast-track implementation.
“The President reflected on the implementation of government’s programme and announced concrete actionable plans for effective implementation of the National Development Plan, which underpins the Medium Term Strategic Framework (MTSF) 2014-2019,” the statement said.
Cluster Ministers are in the process of post-SONA media briefings to elaborate on government’s 2017/18 Programme of Action.
The statement said the 2017/18 Budget Speech will further map out the allocation of resources to the various government programmes as highlighted by the President.
Courtesy of SAnews.gov.za