The ‘construction mafia’ is increasingly threatening South Africa’s burgeoning data centre market, leading to delayed projects, violence and significant financial losses for operators.
“This is a serious problem and I'm sorry to say there has even been loss of life; not one but many people have died as a result of the ‘construction mafia’,” commented Juanita Clark, CEO of Digital Council Africa and co-founder of the FTTH Council Africa. The regulation stipulates that 30% of a construction development project has to benefit the community where it is allocated, by way of employment. The regulation aims to use public procurement as a lever to promote socio-economic transformation, empowerment of small enterprises, rural and township businesses.
“Sometimes companies have to employ additional security, because if you don't give them what they want, they will come and burn down what you have on-site. It’s a big problem for investors and operators.”Despite other challenges, such as infrastructure and regulatory obstacles, SA presents lucrative potential for the market, with more than half of the continent’s data centres located in SA, as hyperscalers and data centre operators continue to establish cloud regions, Clark continued.
SA is the largest market in Africa in terms of investment in data centres, with data centre operators in the country including Africa Data Centres, Open Access Data Centres, Teraco and Microsoft, Amazon Web Service, Telkom, Vodacom,Equinix and Vantage Data Centers, among others, it says.