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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

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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

  • Global Trends

  • Economic Growth Path

  • Service Delivery Framework


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”


2010 Construction Economy


2010 Construction Economy


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


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


Fee income outstanding for more than 90 days (including foreign fee income earnings)


Quality Management System


ISO 9001:2000 Certificate


2010 Construction Economy

  • Competition

  • Tender prices

  • Explore alternative markets

    N

  • R809 billion 3 year budget ??

  • Public sector technical capacity

  • Consulting Engineering Reserve Capacity


CESA OVERVIEW

  • 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 OVERVIEW

  • Infrastructure Research

    • Water: Supply & Quality

      • Prof Grant Cawthorn: “most imminent challenge”

    • Energy (Cost ?)

    • Transportation


CESA OVERVIEW

  • Procurement-Procurement-Procurement-Procurem..

    • Procurement Road Show : Successful

    • 600 Reports from members

    • Bring back Quality ! !

    • CESA acting as CIDB agent : MOU signed


CESA OVERVIEW

  • 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 OVERVIEW

  • 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 one stop shop for infrastructure industry matters


    2010 Industry Events/Issues

    • 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/Issues

    • 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/Issues

    • 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/Issues

    • 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

    • 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 - events

    • Register of Built Environment Professionals (CIDB)

    • Identification of Work (ECSA/CBE)

    • CETA Governance /Value ?


    2011: The Way Forward

    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 Forward

    • 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 Forward

    • 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 Forward

    • 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 Forward

    • 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 Forward

    Service Delivery Framework : 5 frames

    • Professionalise Public Service

      • Deployment

      • Technical professionals for technical positions

      • 5 Year Contracts


    2011: The Way Forward

    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 Forward

    • 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 Forward

    3.Innovative Planning by Government


    2011: The Way Forward

    4. Appropriate construction procurement models


    2011: The Way Forward

    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 Forward

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


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    Can we Succeed?

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


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

    If she can, we can!

    Bit by Bit

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


    ‘PARTNERING FOR GROWTH’

    THANKS


    CONCLUSION

    • 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

    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


    Lessons from abroad


    • SbuNdebele’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 ?

    • To forecast is always dangerous especially into the future

    • PPP’s


    2011: The Way Forward

    3.Innovation


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