Home | Business | PRICE OF CEMENT HIKES BY 34%

PRICE OF CEMENT HIKES BY 34%

12/05/2023 09:03:00 Mhlengi Magongo

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MBABANE - The price of cement increased exponentially in the first quarter of 2023.

A bag of cement from the leading brands cost an average of E109.60 in December 2022; a similar bag now costs E147.05, especially for Ordinary Portland Cement (OPC) brands. Contractors in the country mostly use OPC type of cement which is widely available in the country. OPC is a type of cement that is manufactured and used worldwide. It is widely used for all purposes including concrete: When OPC is mixed with aggregates and water, it makes concrete, which is widely used in the construction of buildings. The cost of purchasing cement has increased three times in the past two quarters which was viewed as a challenge for contractors, according to one of the directors.

Cement

The Business Desk embarked on a journey to hardware stores around Mbabane to compare the price of cement and it was discovered that the lowest amount payable for a bag of cement at the moment was E106.70 from E95.07, while the highest was E147.05 from E109.60. Meanwhile, contractors losing tenders due to infighting within Eswatini Contractors Association (ECA) is starting to have financial implications to some contractors as it is costing them tenders.

This is because some contractors claim they have been running up and down trying to re-register with ECA, but their efforts were in vain as there were allegedly some conditions that were attached to the registration process; withdrawing affidavits from a pending court case and resigning from the normalisation committee.

As such, the contractors in question claim that since they have not registered with ECA, there was no way they could get a certificate from the Construction Industry Council (CIC), which means they cannot bid for tenders. The infighting at ECA started some years ago and things got worse when the organisation was supposed to submit names to CIC for the appointment into the CIC Board. Concerned contractors convened a meeting after discovering that the National Executive Committee (NEC) of ECA had submitted names of candidates, allegedly without their knowledge.

During that meeting, they passed a vote of no confidence against the NEC, elected a normalisation committee and candidates to be submitted for appointment to the CIC Board. However, they were told that the minister of Public Works and Transport had already issued a gazette, confirming members of the Board and they included those who were submitted by the ECA’s NEC. This decision was challenged in court.

Prior to this, in March 2021, CIC suspended ECA for allegedly failing to adhere to some of the council’s requirement and informed its members that it should make payment directly. After the suspension, the members of ECA stopped paying subscriptions to the organisation. However, recently, CIC rescinded its decision to suspend ECA and advised contractors that in order to get the 2023/23 certificates from council, they should ensure that they were members who were in good standing with the contractors association.

The temporal suspension of ECA was lifted in February. The announcement was made by the CIC Acting Chief Executive Officer (CEO), Maqhawe Mnisi, in a statement. Mnisi further advised contractors to ensure that their membership status with ECA was up to date before they renew or register with CIC. He said they would continue to actively engage with ECA to ensure that all issues of concern were addressed.

Comment

One of the members who preferred to comment anonymously said the lifting of the suspension would help address the challenges faced by the contractors. He said the biggest challenge was with sub-contractors who were of the view that they could not voice out their concerns due to the fact that their employers were members of the Board and they are expected to submit their concerns. “Sub-contractors do not have a home, they need one,” he alluded. Worth noting is that, CIC suspended the requirement for a registration certificate from ECA for contractors in April 2021.
Prior to the granting of a certificate to undertake construction works in the kingdom by the CIC of Eswatini, all contractors were, among other documents, expected to provide proof of affiliation with ECA.

This was before they could be considered for full registration with CIC, in line with the Construction Industry Act of 2013. However, CIC announced that this arrangement has temporarily been put on hold. “Members of ECA and contractors at large are hereby notified that with effect from April 20, contractors who ought to have been registered with the ECA shall be allowed to register directly with CIC pending full compliance by the association,” said CIC.

Associations

CIC explained that the decision had been reached in order to allow ECA to comply with the Construction Industry Associations Regulatory Policy of 2016. They clarified that the policy mandates industry associations to submit their membership list, annual programme of action, audited financial statements, code of conduct and constitution. When probed as to what would be the period in which the ECA certificate would not be required when registering or renewing the CIC certificate, the CEO briefly said they would advise industry players on a way forward in due course.

This was also communicated by CIC who mentioned that there had been a serious reduction in the number of effective businesses operations within the construction industry at the height of the COVID-19 pandemic. They mentioned that even if they would have hiked the registration and renewal fees, it would have not been to exorbitant levels but could have matched inflation, which currently averages at 4.5 per cent. However, given the nature of very slow activity in the construction space, the increment was halted in its entirety.

“The ultimate intention of not increasing all registration and renewal fees is to ensure that the cost of doing business remains affordable against all odds despite the tough trading conditions emanating from the COVID-19 pandemic,” said CIC. In terms of Construction Industry Council Act of 2013, Section 27 (10), CIC told stakeholders that renewal was opened for the 2021/2022 financial year. It was stated that renewal would commence on May 3 to Friday May 31, 2021. It was clarified that the renewal period has no bearing on the validity of the CIC certificates which still expire on March 31, 2021.

“Late renewal (renewal after May 31, 2021) of certificates will attract a penalty of 10 per cent of the annual renewal,” said CIC. For renewal, CIC said all contractors were expected to have registered and paid levy for all their ongoing and completed projects according to Section 6 (3) of the CIC Levy Regulations of 2016. Furthermore, contractors that have not remitted the project levy to the council will not be issued with certificate for renewal per the CIC levy regulations,” added CIC.