Eyewitness: COVID-19 and South African construction and rental

George Landsberg, CEO of Hi-Reach Manlift in South Africa, has sent KHL Group the following account on the impact of COVID-19 on the rental and construction sector in the country.

”Because of the ailing economy and a lack of foreign direct fixed investment, the South African construction industry has been dwindling for a number of years. Major construction companies started to close, went into liquidation or business rescue, or refocussed their businesses.

“By the time that the Covid-19 pandemic started having an impact in South Africa, very little had been achieved in changing the fortunes of the countries troubled State-Owned Enterprises (SOE) – such as Eskom, SA Airways and Denel - and the South African economy was still in dire straits.

“The first cases of Covid-19 were only identified in early March 2020, when a group of travellers returned from Italy and started getting sick. This quickly started to escalate and as of today (2 April) the tally of confirmed infections had risen to 1380 with 5 deaths reported.

“The government was very quick to react and on Friday 27 March the country had its first day of a total lockdown of the country. This lockdown is monitored by the police and the military and only essential services and certain emergency trips are allowed.

“This means that all business (except so-called essential services) had to close. This includes construction and the rental industry. Only essential services can continue, with very few exceptions. Among these happen to be the construction projects at Medupi and Kusile power stations by power utility Eskom, which are needed to add to the constrained South African electricity supply grid.

“The only rental companies that are currently allowed to operate, albeit on a scaled-down basis, would be those that supply to these projects, as well as to clients in the rest of the energy sector, such as the petroleum company Sasol.

“The real impact of the pandemic is yet to be felt and at this stage it is mostly the lower-paid employees being laid off. Smaller companies are shortly to start feeling the pain of this and it is expected that many thousands of these smaller companies will not make it, despite government’s promises of assistance.

“South Africa has a unique cultural mix and the fact that many people live in close proximity in the townships means that you might expect that such a pandemic could have disastrous consequences.

“They have a huge population of citizens, and many with underlying compromised immune systems due to AIDS, malaria and hypertension. However, South Africa has had possibly its biggest success story in the way that it handled AIDS before, with very efficient ways of rolling out treatment campaigns. Currently, millions of affected South Africans are receiving anti-retroviral treatment and being monitored. This system may just prove to be a valuable asset in the battle against Covid-19.

“It remains to be seen what the impact will be on the South African economy. It may prove to lead to long-term damage, but like in any such situation, it may also offer some opportunities and could strengthen the President’s hand in affecting much-needed economic reforms that the country so desperately needs.”