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Mar 21, 2008

Competition body to apply its mind to new fee schedules for professionals operating within the built environment

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Fee guidelines for professionals working within South Africa’s built environment are set to come under scrutiny over the next few months, when fee and work-reservation proposals for professionals operating in the sector will be presented to the Competition Commission.

It will be the first time that the commission applies its mind to the issue, and it also arises at a time when the body is conducting a larger investigation into alleged anticompetitive behaviour by construction-materials and -services companies operating in the built-environment setting.

Council for the Built Environment (CBE) CEO Bheki Zulu tells Engineering News that the proposals could be submitted within the next two months, following an agreement between the professions and the National Treasury that fee recommendations be retained. At one point, the Treasury felt these fee schedules to be redundant, given prevailing government policy to procure professional services on the basis of competitive bidding.

“There is consensus that there should be fee recommendations, because it helps both the clients and the professionals in providing some basis for measurement. But the agreement with the Treasury is that these cannot be legally enforced,” Zulu explains, adding that the CBE is assisting with the harmonisation across the professions.

In fact, the CBE, which is a statutory body, is the coordinating body of six professional councils, including the Council for the Architectural Profession, the Engineering Council, the Council for the Landscape Architectural Profession, the Council for the Project and Construction Management Profession, the Council for the Property Valuers Profession, and the Council for the Quantity Surveying Profession.

Zulu reports that, hitherto, the various professions have had differing approaches to fee setting, but that there will now also be an attempt to standardise these at the level of principle.

He argues that the professions have sought to adopt international best practices in the creation of the new fee arrangements as a way of safeguarding against cartel-like behaviour, and that the review by the commission would act as an additional safeguard.

“Given the Competition Com-mission’s current focus on construction, it will be interesting to see what impact that focus will have on the discussions around the fees developed by the councils,” Zulu muses, arguing that it will be important that a balance be struck between the interests of the professions and those of clients and the public at large.

He notes, though, that the demand for the services of built-environment professionals is growing strongly, which could very well lead to fee premiums in future as opposed to the historical tendency of discounting against fee structures.

This fee-schedule review comes amidst a larger review of the various pieces of legislation governing professionals in the sector, which is being led by Public Works Minister Thoko Didiza.

Part of the review will be a refining on the so-called “identification of work” that would seek to reserve certain kinds of work exclusively for those professionals registered with the six councils. This, too, will have to come under the scrutiny of the Competition Com- mission before it can be gazetted.

A major thrust is for compulsory registration of professionals, both to increase visibility of the actual numbers, as well as to ensure that those acting irresponsibly can be properly disciplined.

Currently, it is a voluntary pro-cess, which is why it is estimated that only 45% to 50% of those who studied for a built-environment degree are actually registered professionals.

“We are saying that we should require registration to be compulsory,” Zulu asserts, adding this would probably involve various formal registration levels, starting at graduation and moving through candidacy, certification and possibly even exams.

In the context of specific identification of work, there would be an incentive to move through the levels, as long as areas of overlap, for instance, between engineering and project management, are properly defined.

“We hope the outcomes of the review will be released soon, which should then allow for a process of discussion, as well as a determination as to whether it is in compliance with the Competition Act,” Zulu says, revealing that a draft Bill could emerge before the end of March.

Edited by: Martin Zhuwakinyu
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