The City of Cape Town, in collaboration with Atterbury, Old Mutual Properties, and other stakeholders, has initiated a series of meetings to address the infiltration of alleged criminal enterprises in property development projects. These discussions have culminated in a shared commitment to exclude such entities from future ventures in the sector.

The lucrative practice of construction sector extortion began in KZN, but eventually spread to other provinces after 2016. The crisis in the Cape came to a head after DA councilor Malusi Booi, in charge of Human Settlements, was found to have a corrupt relationship with the 28s gang's construction entity Glomix.

While the City had been alerted to this corruption four year prior, they only acted once SAPS raided Booi's office, after which they rapidly closed a number of contracts with gang-affiliated companies. The gangs subsequently increased pressure on the city by coercing officials, and even murdering City staffer Wendy Kloppers.

The City is now desperate to find a means of vetting the companies they do business with.

Louis van der Watt, Group CEO of Atterbury, underscored the complexities in detecting illicit activities, as these businesses often present themselves as legitimate enterprises. Van der Watt stressed the importance of cooperation with national and local authorities, including the South African Police Service (SAPS) and the South African Revenue Service (SARS), to identify these disguised operations.

van der Watt: "The construction mafia in Cape Town frequently operate through legally registered entities with valid bank accounts and tax clearance certificates. Their financial statements, company registration documents, and other certifications are in order, making it exceedingly difficult to uncover their criminal connections through standard procedures."

He highlighted the sector’s reliance on National Treasury to maintain an updated blacklist of non-compliant entities, acknowledging that the private sector lacks the extensive resources of governmental bodies.

Atterbury is enhancing its vetting processes for subcontractors, ensuring adherence to ethical business practices. Cape Town Mayor Geordin Hill-Lewis pledged to hold National Treasury accountable for maintaining an up-to-date blacklist. The City also plans to introduce a vetting process for Community Liaison Officers involved in development projects.

“Together, we can ensure our construction projects contribute positively to the economy without succumbing to extortionists,” stated Mayor Hill-Lewis. “The City will employ all legal means to combat the construction mafia, collaborate with the private sector, and protect our communities from organised crime.”

The City is also investing in enhanced security for public infrastructure projects affected by extortion and has launched a city-wide anti-extortion hotline. A rewards system is in place for information leading to the arrest and prosecution of extortionists, with anonymous tip-offs encouraged.

Old Mutual praised the City’s efforts to assist businesses in identifying companies with criminal links. The company ensures a robust procurement and screening process for all service providers and avoids blacklisted suppliers.

Neil Gopal, CEO of the South African Property Owners Association (SAPOA), expressed support for the collaborative efforts. "We at SAPOA welcome the joint initiatives to address and eradicate the construction mafia’s negative influence," Gopal stated. "This decisive action is crucial for urban growth and the broader South African economy. We hope this initiative sets a standard for other municipalities, ensuring a safer environment for property development."

The City of Cape Town, Atterbury, Old Mutual Properties, and SAPOA stand united in their resolve to eliminate the construction mafia’s influence. Through collaboration, enhanced vetting, and a commitment to transparency, they aim to create a safer, more ethical environment for future developments.

‍