Caption: Public Works and Infrastructure Minister Dean Macpherson applauds Stefanutti Stocks Coastal Regional Manager Matthew Horwill who was shot by the construction mafia after his company refused to bow to extortion pressure. Photo: Supplied
South Africa’s “real enemy” is the construction mafia and the country will not be held to ransom by its bosses who “sit in posh suburbs” and order suspects to invade building sites and extort business owners.
This was the warning Police Minister Senzo Mchunu gave to organised criminals at a summit on construction in Durban — attended by government officials and business leaders — which aims to develop a comprehensive plan to end the so-called mafia terrorising the sector.
“The construction mafia are the real enemies of South Africa — they are organised and we are getting organised … I want names of kingpins and the untouchables. Nobody in the country is untouchable. We are going to touch everybody that comes onto our radar,” Mchunu said.
“Those people that are busy on sites are actually the extension of some of the people who are sitting back in some posh suburbs who stand to benefit from the activities that are on the ground, while sitting in some posh places directing others to carry guns, and do all sorts of things.
“We are now escalating our investigation activities to reach them, so you are no longer safe … We are not going to be chasing the small fish. We want to go for the bigger fish.”
He said construction mafia crimes included targeted murder, extortion, brandishing illegal firearms and damage to critical infrastructure. In some cases officials collude with gangs “in a situation that could be described as ‘state capture’ in the form of criminal gangs capturing officials, including those in the supply chain”.
“There are other economic crimes committed on the sites, including cash-in-transit crimes … all these crimes happen more or less close together and [are committed] by the same people,” Mchunu said.
The police are investigating 144 cases regarding the construction mafia in the Eastern Cape, 16 in KwaZulu-Natal, 20 in Gauteng, 15 in the Northern Cape, 22 in the Western Cape and 11 in Limpopo, the minister said.
“I stand here to do one thing in particular, to make a firm commitment on behalf of the South African police to address one of the most pressing challenges we face in the construction sector — the need for crime-free construction sites.
“It is a choice between the South Africa that we want, one where there’s stability and order, or a South Africa where there’s chaos and disorder.”
He said the construction sector was fundamental to the development of the country but had increasingly been targeted by “organised syndicates and extortion rackets that threaten not only individual projects but also disciplines and the stability of entire communities”.
The police had partnered with the private sector and the Private Security Regulatory Authority to combat the mafia.
Public Works and Infrastructure Minister Dean Macpherson said the mafia was also the “biggest threat to transformation”, telling the summit: “It is black businesses that are the most under threat because of these activities, and that is why it’s something that should concern big business, small business, everybody.
“If we want to see contractors grow, and small businesses become big businesses, we’ve got to neutralise the threat of extortionists to them because they don’t have the ability to fight back as a big business does,” Macpherson said.
Criminal syndicates often presented themselves as legitimate business forums and had delayed many public and private construction projects by demanding a portion of the costs.
“It was clear to me that we would never achieve our vision to turn South Africa into a construction site if we were unable to bring an end to the disruption of construction sites. And it is clear to me today that we cannot be negotiating with criminals to allow construction projects to continue,” Macpherson said.
“How can it be right that heavily armed criminals are allowed to freely enter construction sites? How are these thugs allowed to physically intimidate and threaten construction workers? What has happened to the rule of law in our country, if this behaviour is allowed to go unchecked and unpunished?”
The disruptions cost contractors, businesses and the state millions and delayed essential services to vulnerable communities.
“This means delays in sanitation, water, schools, hospitals and police stations to thousands of people who need it. We simply cannot continue to allow this to happen,” Macpherson said.
“Disruptions to construction sites chase away private-sector investment. No business wants to build homes, factories or offices under these conditions. And this means fewer jobs are created at a time when unemployment is at historic levels.”
He said the government needed to work closely with the private sector and the police to identify and confront the issue.
“It may require that we replicate the pioneering work of the City of Cape Town to join forces with the private and public sectors to fight the scourge at developmental projects. The police will need to take stronger action to arrest those found guilty of disrupting infrastructure projects.”
He said Mchunu, national police commissioner General Fannie Masemola and KwaZulu-Natal commissioner Lieutenant-General Nhlanhla Mkhwanazi had brought “a new sense of urgency” to confront the issue “head on” over the past few months but urged the National Prosecuting Authority to act quickly to hold suspects accountable.
“Court cases against those accused of disruption of construction sites cannot be delayed for months on end.
“To end the influence of these criminal syndicates at infrastructure projects, it will require that we remove the incentives for these criminal syndicates,” he said.
“Once we open the door to negotiations, and once we give in to paying what is essentially a bribe, it means that these criminal syndicates are incentivised to repeat their actions elsewhere. We must never be complicit in bribery, corruption, extortion and racketeering.”
He related how gunmen had opened fire on Stefanutti Stocks coastal regional director Matthew Horwill’s vehicle while he was approaching the company’s offices in Pinetown in June.
“Matthew was shot in the arm and rushed to a nearby hospital. Make no mistake, these criminals intended to murder Matthew in broad daylight because they could not get what they wanted. Because Stefanutti Stocks refused to negotiate with criminals, he nearly paid with his life.”
The 30% local procurement rule introduced by the treasury under former president Jacob Zuma had been used by criminal syndicates to extort contractors, Macpherson said. The rule stipulates that 30% of spending on public infrastructure and procurement worth more that R30 million should go to local sub-contractors.
“Criminals use the 30% local procurement rule to demand that 30% of a project’s cost be paid to them directly. Or they demand that only their people or contractors be hired for construction to continue,” Macpherson said.
“In many cases, these criminal syndicates demand the 30% payment without ever doing any work. They demand their 30% share, even if the construction project isn’t valued over R30 million. And now, they demand their 30% share from the private sector as well, even though the treasury rule has never applied to their projects.”
He said an “honest conversation” should be held on whether the 30% local procurement rule achieves its intended outcomes or whether other interventions can meaningfully empower people.
“It is legitimate, hardworking black businesses in the built environment that have suffered the most, when they were supposed to benefit the most. We are unashamedly committed to the empowerment of all South Africans, but we cannot allow criminals to profit under the guise of empowerment.”
Deputy finance minister Ashor Sarupen said criminal groups have disrupted over 180 projects worth R63 billion since 2019, using tactics such as extortion, intimidation, violence and sabotage.
“Their demands for up to 30% of contract value undermine the integrity of our procurement systems and delay critical infrastructure delivery. These disruptions are not merely operational challenges. They represent a critical stress test for our economic governance,” he said.
He said the construction industry is a vital cog in the country’s economic engine, contributing around 3% to GDP and employing more than 1.3 million people. The sector created about 176 000 new jobs in the third quarter of 2024.
“This sector is a lifeline for low-skilled workers, who often struggle to find opportunities elsewhere. Construction projects also have an unmatched multiplier effect. For every R1 million invested in construction, more than three jobs are created — this is the highest multiplier across all sectors in our economy.”
To confront the challenges facing the sector, the government is pursuing a three-pronged strategy of reforming public procurement, expanding public-private partnerships and increasing infrastructure investment, Sarupen said.