In light of the launch last week by President Cyril Ramaphosa of an economic stimulus package for South Africa, Consulting Engineers South Africa (Cesa) reiterates that public funds management is critical to deriving true value for money.
CEO Chris Campbell said in a statement issued on Friday that, over the past few years, Cesa has been partnering with government to assist and advise the public sector on maximising its investment in infrastructure and ensuring that the correct capacity is in place to design and implement large-scale, durable projects.
He added that the first step in the economic stimulus process would need to be rooting out corruption where it is still taking place.
“While blatant corruption is bad, appointing companies for infrastructure projects that lack both the capacity and expertise and simply sell-on projects adding no value to the process is equally bad.
“We would argue that this is tantamount to fronting and defeats the objective of developing future capacity in the consulting engineering industry, as part of a credible transformation process for our industry,” he said.
Public sector investment in infrastructure is often no less than a 30-year investment, sometimes in excess of 50 years, especially with regard to large-scale road, bridge and dam construction projects.
The upfront planning and design phases could take between three and five years before construction starts and the relative lifecycle cost contribution to the infrastructure investment is as little as 3%.
The next stage – construction – constitutes a cost contribution of 20% and may take place over three to five years.
Therefore, after a period of six to ten years, an investment of up to 23% of the total cost of ownership has been expended even before the infrastructure has been rendered available for use, said Campbell.
He explained that public sector entities are then left with an asset which is meant to last for at least 30 years, provided that it is correctly used and regularly maintained. The latter is known as the operation and maintenance phase.
This phase, in reality, constitutes the remaining 77% of the total cost of ownership in the investment process.
“Our current public infrastructure procurement process counter-intuitively drives costs down in the 3% area when appointing consulting engineering professional service providers and seem to be oblivious to the opportunity to rather invest more in this phase so that the best professional service providers can maximise the quality of service that would derive savings in the remaining 97% cost component of the investment.”
Campbell suggested appointing recognised companies with the appropriate expertise and capacity to do the upfront engineering, planning and design as a first step towards stemming the tide against bogus service providers.
Then, he said, it is necessary to optimise money infrastructure investment from a total cost of ownership perspective in infrastructure, which starts with the 3% invested in the procurement of the appropriate consulting engineering services.
Cesa was aware of the capacity challenges and the dire shortage of procurement practitioners in the public sector who understand the difference between procuring for infrastructure development and general procurement.
“It is for this reason that we volunteered our offer of partnership with the State shortly after the President made his ‘Thuma Mina’ address during his inauguration earlier this year.
“Unless we act to correct this flawed process, we will not, as a country, be able to afford to operate and maintain these assets optimally, as potential ‘in-built’ shortcomings through cheap designs, poor equipment choices and lack of quality supervision during construction will mean more frequent maintenance at higher cost to operations or simply that maintenance will be deferred or not done,” noted Campbell.
Cesa would rather advocate for a more informed and holistic approach to be adopted, one that drives investment in infrastructure with a “long game” vision, to use a good golf analogy.
“We need to drive this in a manner that ensures that future generations are not saddled with the plague of early failure of functional infrastructure or unsafe infrastructure and the continuous challenge to rebuild what should have been lasting infrastructure.”
Additionally, spending responsibly will enable more infrastructure delivery at a time that the need for functional and lasting infrastructure grows daily.
“We desperately need to focus on the role infrastructure investment plays in stimulating our economy by not only spending more money but spending it right,” said Campbell.