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Cape Town construction mafia costs billions, report finds
18 Jun 2024
Cape Town's construction industry is under siege by the construction mafia, a serious problem that puts billions of rands worth of projects in jeopardy, according to a new report by the Global Initiative Against Transnational Organized Crime (GI-TOC). The report, titled The Shadow Economy: Uncovering Cape Town's Extortion Networks and authored by Global Initiative Against Transnational Organised Crime senior expert Jenni Irish-Qhobosheane, explains how these organised crime groups use force, threats, and blackmail to get a cut of construction contracts.
The construction mafia is costing the country billions. Source: Shivendu Shukla/Unsplash
In February 2024, City of Cape Town official Robbie Roberts said at a workshop hosted by Business Against Crime South Africa that extortion was putting R3bn worth of construction projects at risk and that the city was trying to protect 22 sites, six of which had been shut down or closed. He said contractors had faced such severe threats that they could not continue their work, and some construction workers had even lost their lives.
According to Roberts, extortionists would show up on site and demand that work be halted until they got a portion of the contract or were given contracts to provide security services. He also disclosed that some construction companies were building extortion fees into their quotes and tenders as an input cost.
Extortion has also affected infrastructure development. In June 2023, Rob Quintas of the city’s Urban Mobility Portfolio Committee said that at least seven major projects, from building new public transport to road reconstruction and stormwater maintenance, had been ‘hampered or stopped because of threats, intimidation and killings’, and that the municipality could lose up to R58.6m in unspent transport infrastructure budget.
At the launch of an anti-extortion campaign in October 2023, Cape Town mayor Geordin Hill-Lewis said:
We are spending tens of millions … I think the figure this year is R55 million in extra security, not total security, but extra security – just to protect those sites so that construction can go on
The construction mafia invades construction sites, scares workers and officials, and demands money or a share in the projects.
If they do not get what they want, they have used violence, such as fire and murder. The report found that the construction mafia has already caused the postponement or cancellation of several major projects in Cape Town, costing the city millions of rands in lost income and economic opportunities.
Advanced operations
One of the most worrying findings is that the construction mafia has become more advanced in its operations. They have formed groups called "local business forums" to blackmail development projects, and they have also infiltrated government institutions to get information and resources.
Irish-Qhobosheane cautions that if the construction mafia is not dealt with, it could have a disastrous impact on Cape Town's economy and its ability to provide essential infrastructure and services.
By 2020, infrastructure projects across Cape Town were falling prey to the city’s own version of the construction mafia, in which housing and infrastructure projects were targeted.
In June 2023, Quintas said the problem was ‘only getting worse’, adding:
They are holding the city and our contractors ransom, and ultimately at the expense of service delivery to those who need these services most
The GI-TOC report urges a joint effort by the government, law enforcement agencies, and the construction industry to fight the construction mafia. This includes increasing security at construction sites, investigating and prosecuting those involved in extortion, and strengthening regulations to prevent organised crime from infiltrating the industry.
Irish-Qhobosheane also stresses the importance of community engagement and awareness-raising to build resistance against extortion and protect Cape Town's construction industry from this growing threat.
