Industry body Consulting Engineers South Africa (Cesa) welcomes government’s focus on infrastructure development in support of economic recovery and job creation, as illustrated in Finance Minister Tito Mboweni’s Medium-Term Budget Policy Statement (MTBPS) last month, says Cesa CEO Chris Campbell.
He tells Engineering News that Cesa supports the development of an infrastructure fund in partnership with the private sector to enhance economic growth and improve governance.
“We look forward to the intentions of government materialising and, as an industry, our message for the past three years has been that we are in a position, as the private sector, to partner with government to develop and build infrastructure to a level that supports good service delivery.”
Further, he notes that infrastructure must be “brought to a state” at which it can and will stimulate other economic activities.
Campbell believes that optimism in the construction sector has increased in the past year, fuelled by President Cyril Ramaphosa’s identification of the need for economic growth and the need for it to originate from a primary focus area such as infrastructure development.
Cesa is pleased that government is developing a framework for financing infrastructure that will enable investors to assess potential long-term returns on public infrastructure projects.
However, Campbell says South Africa needs to stimulate the growth of its economy before investors will invest in the country, but there is still uncertainty, and many promises are made prior to an election year. “The proof of the pudding is in the eating.”
Although Cesa welcomes these positive steps by government, Campbell cautions that there are still many challenges to confront such as discounting the professional fees of consulting engineers, which is plaguing the sustainability of the consulting engineering industry.
“Consulting engineers must factor in the safety of many more people when they do design work and manage the project-execution process, without even mentioning trying to minimise the client’s total cost of ownership in the investment,” he comments.
Campbell warns that the quality of the service provided will be sacrificed, should a client asking for a discount. Consulting engineers provide expertise for industries, and being frugal on compensating for their professional services could have dire consequences for infrastructure projects.
If consulting engineers are paid too little, they cannot afford to spend time on optimisation or anticipate problems and opportunities for saving the client money during construction or later operations and maintenance, he elucidates.
“Consulting engineers’ fees make up about 2% of the life-cycle cost of the investment. If the professionals must reduce their fee, they don’t have enough time and cannot afford to put in the expertise that would be required to help the client efficiently spend the other 98% of the cost. The client wants the consulting company to deploy its best and most competent resources on the project, but it simply cannot afford to do that, otherwise it will go out of business.”
Campbell states that, if the most efficient systems and materials are not incorporated into the design at the outset, a client will pay more over the years as systems and infrastructure fail. “It is counter-intuitive to be squeezing the consultant.”
Further, he notes that procurement officials may have a limited knowledge and appreciation of how to better drive their decisions around costs.
Campbell believes that there should be a stronger partnership between procurement departments and technical practitioners, and that the private sector, along with the consulting industry, must create a better understanding of how to better derive value for money from investment in infrastructure.
He notes that Cesa has met with the Department of Cooperative Governance and Traditional Affairs – which comprises the Department of Cooperative Governance and the Department of Traditional Affairs – as well as the Municipal Infrastructure Support Agent (Misa).
Cesa plans to work closely with Misa and offer support in terms of training regarding procurement and delivery management and hopes that this will aid in addressing the issue of discounting the professional fees of consulting engineers, Campbell concludes.