For the implementation of LED projects in communities, Wesizwe sourced local contractors. This was done in order to encourage economic development in the communities, as well provide opportunities do to business with the mine. Due to the lack of expertise and experience of the local service providers and contracting companies, a number of challenges arose from this exercise namely:
- Generally: Lack of Pricing Skills (underpricing and overpricing)
- Contractors have no idea of the capital burn rate of the project and therefore the provisions for cash outflow.
- Contractors have very little working capital and no access to finance.
- Inability of most contractors to submit proper invoices.
- Almost all contractors have the misconception that it is the responsibility of Wesizwe site personnel to control quality and to prepare snag lists.
- Very few local contractors conduct their own quality inspections on a daily basis. They do not spend time checking their product to see if it meets the standards required by the client, some contractors delegate this responsibility to unskilled supervisors on site.
- Very little time if any is spent on procurement planning. This is evident in contractors spending most of their time driving to buy materials.
SMME’s working on a construction
As a result of these identified challenges, Wesizwe saw a need to invest time, energy and money to assist local contractors to develop their business skills. SMME Training was provided in the following areas:
- Business Management Training: The training areas included marketing, managing a small business, business administration and basic recording, business plan development, research viability, and entrepreneurial qualities
- Training in Tendering: The training areas included the following – What is a tender? What to look for in a tender. Compliance required in tendering. How to complete tender forms. How to cost and price a tender. The module also covered Financial Management, Cash Flow Management, Accounting Cycles and Budgeting.
A Wesizwe’s quantity surveyor providing guidance to SMME’s
Additional support is also being provided to the SMMEs to assist with daily operations:
- Project and quality management – provided by Wesizwe project personnel
- Community Portable skills training – to create a pool of skilled employees for the SMMEs
- Paying suppliers of material directly and early payment to suppliers to assist with cash management issues
Total impact 2013
Total spend on Local Economic Development
Total number of jobs created
99 (50 youth, 20 women)