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PARTNERING FOR GROWTH Working together towards a sustainable future Northwest Province 23 June 2011. CONTENTS. 1.INTRODUCTION 2. 2010 OVERVIEW The Construction Economy CESA: Consulting Engineers South Africa Industry Issues and Events Non-events 3. THE WAY FORWARD: 2011 & BEYOND

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PARTNERING FOR GROWTH

Working together towards a sustainable future

Northwest Province 23 June 2011


Contents
CONTENTS

1.INTRODUCTION

2. 2010 OVERVIEW

  • The Construction Economy

  • CESA: Consulting Engineers South Africa

  • Industry Issues and Events

  • Non-events

    3. THE WAY FORWARD: 2011 & BEYOND

  • Global Trends

  • Economic Growth Path

  • Service Delivery Framework


Introduction
INTRODUCTION

  • Spotlight on Infrastructure/service delivery challenges

    • T Manual : “Fail to deliver services despite adequate funding”

      CESA

  • 2009 : Talk 2010 : Walk 2011 : Work

  • Focus on participating to grow SA

  • “PARTNERING FOR GROWTH”




Industry confidence
Industry Confidence

Source: CESA BECS, BER


Fee income earned by Sub-disciplines: % ShareDecember 2010

Question:

What type of work did your company engage in during the past 6 months?

Source: CESA BECS


Fee earnings by sector market share dominated by transport and commercial sector
Fee earnings by sector: Market Share Dominated by transport and commercial sector


Provincial Market Share: December 2010

Vs change in market share from December 2009

Income distribution per province

GAIN

market share


Fee income earned by type of client

% Share

Local (SA) Income distribution per fee paying client type, during the past 6 months


Competition in tendering

During July – December 2010 competition for work was (Tick selection)


Bursaries

% of Salary / Wage bill


Training (Direct costs)

% of Payroll


Industry Capacity Utilisation

Of existing technical staff



Quality Management System foreign fee income earnings)


ISO 9001:2000 Certificate foreign fee income earnings)


2010 construction economy2
2010 Construction Economy foreign fee income earnings)

  • Competition

  • Tender prices

  • Explore alternative markets

    N

  • R809 billion 3 year budget ??

  • Public sector technical capacity

  • Consulting Engineering Reserve Capacity


Cesa overview
CESA OVERVIEW foreign fee income earnings)

  • Small/New firms joining CESA

    • 78 new since 2009 Ave size = 12 members

  • Transformation

    • 2009 - 38% ; 2010 - 42% : 2011 to date - 55%

    • YPF

    • SABTACO

  • Mergers and Acquisitions amongst Firms

  • Globalisation of SA Firms

  • Young Professionals Forum


Cesa overview1
CESA OVERVIEW foreign fee income earnings)

  • Infrastructure Research

    • Water: Supply & Quality

      • Prof Grant Cawthorn: “most imminent challenge”

    • Energy (Cost ?)

    • Transportation


Cesa overview2
CESA OVERVIEW foreign fee income earnings)

  • Procurement-Procurement-Procurement-Procurem..

    • Procurement Road Show : Successful

    • 600 Reports from members

    • Bring back Quality ! !

    • CESA acting as CIDB agent : MOU signed


Cesa overview3
CESA OVERVIEW foreign fee income earnings)

  • Conference on Alternative Delivery Mechanisms

  • Business Integrity

    • Talking talking ..... but walking ?

    • CESA code of conduct

    • Integrity pact : Commit to good Governance (Busa + CIDB)

  • Sustainability guidelines

  • Small Company Workshop


Cesa overview4
CESA OVERVIEW foreign fee income earnings)

  • School of Consulting Engineering

    • 124 courses

    • 2 000+ delegates

    • Candidate Academy for Mentors & Mentees

    • Certificate in Consulting Engineering Management

  • Client Liaison & Access to Decision Makers

  • Panels of Expert Members

  • Media Coverage (R5 million)

    ---


  • CESA the o foreign fee income earnings)ne stop shop for infrastructure industry matters


    2010 industry events issues
    2010 Industry Events/Issues foreign fee income earnings)

    • Soccer World Cup

      • Engineering Excellence

      • Legacies & Lessons

        • Co-operation/Partnerships

        • Strategic and capital project planning

    • National Planning Commission

      • CESA keen to participate


    2010 industry events issues1
    2010 Industry Events/Issues foreign fee income earnings)

    • The Green Wave

      • 83% of SA emissions from energy sector

      • 30 Facilities contribute 95% of all SA emissions

      • SA carbon intensity > China, India

      • SA contributes 0,98% globally


    2010 industry events issues2
    2010 Industry Events/Issues foreign fee income earnings)

    • The Green Wave (cont)

      • Climate Change Conferences : Cancun (2010), Durban (2011)

      • Green house gas emissions : (Cop 15)

        • Carbon credits : 18 CDM (Clean Dev. Mechanisms) Projects

      • Carbon taxes on vehicles (Right reasons?)

      • Green Building Council

      • Green Infrastructure body ?


    2010 industry events issues3
    2010 Industry Events/Issues foreign fee income earnings)

    • BRIC + S

      • Population : 3,5 / 6,9 Billion ( 51%)

      • 40% of World economy

      • C =2; B=7; I=10; R=11; SA=28th biggest globally

      • Commodity driven


    2010 non events
    2010 Non - events foreign fee income earnings)

    • Construction Industry Charter

    • Municipal Systems Amendment Bill (in the “Z” file)

    • Service Delivery

      • Protests

      • Unspent budgets: Job losses ..... R12.4 bn

      • Turn around interventions

      • Professional Technical Leadership 5 100 1 800


    2010 non events1
    2010 Non - events foreign fee income earnings)

    • Register of Built Environment Professionals (CIDB)

    • Identification of Work (ECSA/CBE)

    • CETA Governance /Value ?


    2011 the way forward
    2011: The Way Forward foreign fee income earnings)

    According to Thomas Malthus

    “ World is fast heading for a food crisis leading to mass starvation. ”

    Circa 1750

    Oxfam International Report

    “Who will feed the World?”

    5 May 2011


    2011 the way forward1
    2011: The Way Forward foreign fee income earnings)

    • Global Trends

      • West East (G7 E7)

        • Examples visible

        • Future alliance partners

        • Global Competition in SA

    • Africa

      • Increased world focus on Africa

      • Strong growth

      • Corridor developments


    2011 the way forward2
    2011: The Way Forward foreign fee income earnings)

    • South Africa

      • Acc to Int’l Fin Corp: “Doing business”: 34th /183

      • SA Economic Growth Rate below average

      • Skills

      • Municipal Elections : delays

      • Corruption is out of hand


    2011 the way forward3
    2011: The Way Forward foreign fee income earnings)

    • New Growth Path

      • Infrastructure is cornerstone

        • Jobs during Construction : 7 jobs per R1 million

        • Jobs to operate and maintain over lifespan

        • Improves Productivity

        • Attracts investment : more jobs

      • Unease about kicking the goals


    2011 the way forward4
    2011: The Way Forward foreign fee income earnings)

    • 30 000 engineering graduates 2014 ?

      • 2010 : 2 500 engineering graduates pa

      • Enhance Quality of Educators

      • Private sector will respond

    33

    28

    23

    18

    13

    8

    Number of graduates

    GFCF as a % of GDP

    Civil Engineering graduations - UCT South Africa’s GFCF as a % of GDP


    2011 the way forward5
    2011: The Way Forward foreign fee income earnings)

    Service Delivery Framework : 5 frames

    • Professionalise Public Service

      • Deployment

      • Technical professionals for technical positions

      • 5 Year Contracts


    2011: The Way Forward foreign fee income earnings)

    2. Infrastructure planning/programming

    • 1.Too few South Africans work

    • 2.The quality of school education for most black people is sub-standard

    • 3.Poorly located and inadequate infrastructure limits social inclusion and faster economic growth

    • 4.Spatial challenges continue to marginalise the poor


    2011 the way forward6
    2011: The Way Forward foreign fee income earnings)

    • 5.South Africa’s growth path is highly resource-intensive and hence unsustainable

    • 6.The ailing public health system confronts a massive disease burden

    • 7.The performance of the public service is uneven

    • 8.Corruption undermines state legitimacy and service delivery

    • 9.South Africa remains a divided society


    2011 the way forward7
    2011: The Way Forward foreign fee income earnings)

    3.Innovative Planning by Government


    2011 the way forward8
    2011: The Way Forward foreign fee income earnings)

    4. Appropriate construction procurement models


    2011 the way forward9
    2011: The Way Forward foreign fee income earnings)

    4. Appropriate construction procurement models (cont)

    • PPP’s

    • Framework Agreements

      (CIDB Procurement Note 15 of 2008/10)

    • Target Cost Contracting

      • International Experience

      • S A Experience

        • Reduce Client Management Resource Needs

        • Meet social objectives


    2011 the way forward10
    2011: The Way Forward foreign fee income earnings)

    5. Cultivate a mutually trusting relationship between Private and Public Sector


    ????????????????????????????????????????????? foreign fee income earnings)

    Can we Succeed?

    ?????????????????????????????????????????????


    ????????????????????????????????????????????? foreign fee income earnings)

    If she can, we can!

    Bit by Bit

    ?????????????????????????????????????????????


    ‘PARTNERING FOR GROWTH’ foreign fee income earnings)

    THANKS


    Conclusion
    CONCLUSION foreign fee income earnings)

    • Outlook improving after World Cup Paralyses

    • Shortage of Technical leadership

    • CESA Members employ 21 200 experienced infrastructure design and management experts

    • CESA is keen to partner with its clients to grow South Africa

      Let’s WORK TOGETHER

      ‘KOM ONS WERK SAAM’


    33 foreign fee income earnings)

    28

    23

    18

    13

    8

    Number of graduates

    GFCF as a % of GDP

    Number of graduates

    Civil Engineering graduations - UCT South Africa’s GFCF as a % of GDP


    Lessons from abroad
    Lessons from abroad foreign fee income earnings)


    Lessons from abroad1
    Lessons from abroad foreign fee income earnings)


    Lessons from abroad2
    Lessons from abroad foreign fee income earnings)


    • Sbu foreign fee income earnings)Ndebele’s infrastructure R1 trillion

    • Ministers of finance Africa

    • DBSA loans Zambia annual investment R1 billion

    • Cabinet discussing AMD

    • S’hambaSonkaWalking together?

    • Masibambisane” Let’s work together

    • Thomas Malthus 1700’s : Food catastrophy

    • CeesBruggema 2007: Paradigm shift Stelth bomber infrastructure spend to 2015 ?


    Way forward
    Way Forward ? foreign fee income earnings)

    • To forecast is always dangerous especially into the future

    • PPP’s


    2011 the way forward11
    2011: The Way Forward foreign fee income earnings)

    3.Innovation


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