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Construction takes a knock

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Maintaining the strictest lockdown restrictions for the industry has put thousands of livelihoods at risk

The closure of construction sites is not only affecting those directly employed by the sector but also having a tremendous ripple effect on many other end users.

Industry role players and stakeholders are fuming that the sector has not been allowed to open under Level 4. Residential developers who were planning to give transfer are being delayed not just by the closure of construction sites but also delays in obtaining rates clearances from local authorities and the closure of the Deeds Office, says Deon van Zyl, chairman of the Western Cape Property Development Forum.

“Back-to-back transfers will impact all parties who are not ready to pass transfer due to new projects not being completed and ready for transfer.” Similarly, commercial and retail tenants working to strict deadlines need to restrategise their businesses both in terms of commercial leases and business pipelines, he says.

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Growth in warehousing capacity will also be delayed, impacting on the ability to receive orders which are already in the pipeline. “Suppliers of materials going into warehouses and distribution centres will receive pushback due to lack of receiving capacity.”

Van Zyl says the ongoing closure of construction sites is “unfortunate” . Those in the industry had hoped the government would hear their pleas to be allowed to go back to work. “The current situation is particularly unfortunate.

The construction sector is one of the most regulated industries from a health and safety perspective. The ripple effect of the ongoing closure of construction sites is felt by labour and all supply industry serving construction. It does not help to open factories if the take-off to downstream industries is not open and active.”

David Sedgwick, managing director of Horizon Capital, says the decision to not allow the commercial construction industry to start up under Level 4 is “ill-considered and irrational”.

It is also not in the best interests of those workers who are losing their livelihoods. “There were submissions from industry bodies, political parties and private companies setting out a very detailed, responsible and internationally accepted proposal to allow the commercial construction industry to get back to work. These guidelines were devised by international best practice and are consistent with other countries’ measures taken to allow the construction industry to operate even under lockdown conditions.

“As contained in a number of the submissions, it is unfathomable how mining (open-cast and underground) can be allowed to resume, and in some instances all the way up to 100% capacity, while commercial construction remains shut.”

Sedgwick cannot see the logic applied to this decision. “Under Alert Level 4, all manufacturing can start up to some extent, while construction workers starve and watch as their jobs evaporate.”

The other “great uncertainty” all firms are grappling with is how long Level 4 will last and whether they can hold out for levels 3 and 2. These, he says, might be months away given the accelerating spread of Covid-19 under the strictest lockdown measures.

“Covid-19 will be around for a long time and we have to accept that and deal with it responsibly. Our workers don’t have the luxury of staying in lockdown with a fiscal stimulus package in excess of $2.5trillion behind them, as in the US.

“If government wants to save lives, never mind livelihoods, the economy needs to be opened up based on an appropriate risk mitigation approach. If an industry can comply with global best practice and show its ability to safely implement mitigation measures, such as screening, social distancing and stringent hygiene practices, it should be allowed to operate,” Sedgwick says.

Van Zyl say: “Although we try to remain positive, we do not see the light at the end of the tunnel. We have no idea when construction will be allowed to commence and when labour will be able to earn. The ripple effect continues to be felt throughout the economy and labour force.”

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