Threat to block R11bn factory

Xu Heyi and Phumulo Masualle at the 11 Billion rand BAIC launch at Coega IDZ Chinese investment sod turning ceremony

Bay SMMEs say they will prevent construction of huge Chinese motor plant if they are not included

Nelson Mandela Bay SMMEs have threatened to shut down the construction site of Beijing Automotive Group (BAIC) if smaller and black-owned businesses are not included in the planning and awarding of local contracts tied to the massive R11-billion project.

Speaking at a stakeholder briefing, hosted by the Industrial Development Corporation (IDC) at the Radisson Blu hotel yesterday, representatives of the National African Federated Chamber of Commerce and Industry (Nafcoc) said construction of BAIC’s manufacturing plant in the Coega Industrial Development Zone (IDZ) would not go ahead if they did not benefit adequately from the project.

This comes after weeks of growing tension between Nafcoc, representing SMMEs in the metro, and the IDC heading up the project alongside BAIC.

Acting Nelson Mandela Bay Nafcoc secretary Mandla Msizi said the chamber had signed a memorandum of understanding with other SMME forums to present a united front in negotiations with the IDC on the BAIC project.

He said the decision to disrupt construction in the IDZ if their demands were not met had been made when news of the project broke.

“These negotiations are a challenge facing us as a community in a business structure, and we will stop that site if we do not get what we want.”

He said their main concern was ensuring that smaller businesses in the Nelson Mandela Bay metro received a portion of the project.

South African companies were already competing for a smaller portion of the total amount, as part of BAIC’s agreement to build the plant was to bring in Chinese state-owned construction company Chinese State Construction Engineering Corporation.

“We find ourselves, as Nafcoc, being undermined and neglected when it comes to the decision-making and planning process,” Msizi said.

“We [go] to stakeholder engagements and watch presentations that were discussed in a boardroom where we were not present.

“The implementation part is when everybody benefits, but to secure the beneficiation of our members, it is important to be part of the planning.

“If we do not see our people participating in a fair and square manner, then that construction site will be stopped,” he said.

IDC public relations manager Mandla Mpangase said any action to stop or delay work at the BAIC site would be regrettable.

“It will be very unfortunate if this were to happen, particularly as no construction work has commenced yet,” he said.

“We are working with Nafcoc and other local business chambers and formulations to identify and create business opportunities for the benefit of all stakeholders.”

Mpangase said at least 35% of any “construction work package” should be allocated to SMMEs as per the understanding with project owner BAIC.

“We will continue to engage all the key stakeholders in the project, including all business chambers,” he said.

Msizi also said continuous engagement was crucial to prevent any action from being taken, and he would try to arrange a meeting with the IDC early next week.

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