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Jul 30, 2010

Competition for African projects hots up

CESA president Zulch Lötter and CESA CEO Graham Pirie discuss consulting engineers seeking cross border work and delayed payment by clients. Camerawork: Nicholas Boyd. Editing: Darlene Creamer.
Engineering|Africa|Consulting|Export|Pipelines|PROJECT|Projects|Road|Sanitation|Systems|Water|Africa|Contracting|Maintenance|Service|Services|Solutions|Systems|Consulting Engineers|Infrastructure|Operations|Pipelines
Engineering|Africa|Consulting|Export|Pipelines|PROJECT|Projects|Road|Sanitation|Systems|Water|Africa|Contracting|Maintenance|Service|Services|Solutions|Systems|Consulting Engineers|Infrastructure|Operations|Pipelines
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Consulting engineers are increasingly looking cross-border for projects in Africa, says Consulting Engineers South Africa (Cesa) president Zulch Lötter.

In the current economic climate, engineers have to be more entrepreneurial to compete, adds Cesa CEO Graham Pirie. However, the competition for African projects is intensifying, which, considering the challenges and intrica- cies of working on the continent, poses a risk, particularly for newcomers to cross-border work, says Lötter.

Competition for African projects traditionally comes from Europe and, in some instances, the US, but it is now increasing from India and Australia, and in China’s contracting and consulting sectors, he says.

However, he explains that the Built Envi- ronment Professions Export Council (BEPEC) helps to mitigate these risks. The council was created in 2008 with the support of Cesa, besides other organisations, as a Section 21 nonprofit company, in a public–private partner- ship with the South African Department of Trade and Industry. The BEPEC secures and funds international market access to clients, and generates increased business opportunities by adding value to member firms’ international business development activities. Its role extends to informing members of projects and issues to be aware of when working cross-border.

Meanwhile, Pirie believes that, as a result of the flattening of acti- vity and the shortening of local project pipelines, many firms, including consultants and contractors, are retrenching staff. One solution would be for public- sector projects to be initiated at local government level, where there is available funding, and a critical need for infrastructure. Besides the direct benefits, the provision of water, sanitation and road infrastructure requirements and, particularly, their operation and maintenance, is a market segment that needs to be unlocked, he says.


He explains that, although there is a need for new water and sanitation infrastructure, Cesa would like to see greater focus on the operations and maintenance of existing infrastructure.


Pirie believes that the non- delivery status of the public sector, particularly at local authority level, is still causing frustration in the industry. He says that the root cause is that public-sector workers lack the requisite quali- fications and experience with which to tackle the significant challenges in the industry.


However, Lötter says that there has been some positive response from government in this regard, referring to the amendments to the Local Government: Municipal Systems Act of 2000. The legis- lation regulates that the incumbents in certain positions in the local authority have to comply with specific minimum qualifications.


Cesa is investigating certain delivery models that have been successfully used abroad to solve delivery problems and which could be custom-made for South Africa. In October, European, Australasian and local experts will be making presentations on these models, at the Cesa annual general meeting and conference. The results of this initiative will be brought to government’s attention through conferences and dialogue, as well as Cesa channel partners, such as Business Unity South Africa (Busa) and the Engineering Council of South Africa.


Another concern for Cesa is next year’s local government elections and the traditional slowdown in decision-making ahead of this event, as well as the time it will take the new decision-makers to learn the ropes after the election.


“Unfortunately, we anticipate a hiatus in delivery and a worsening of the situation around this time,” says Pirie, adding that this can be tackled if the situation is highlighted.


However, Lötter believes that, while government and its decision-makers are acutely aware of the governance and management shortfalls, they are faced with the challenge of managing the solutions. He believes that the only way to tackle this situation is to use the recourses available in the private sector, predominantly in the consulting fraternity, to work together with government. In this regard, Cesa is supported by Busa, besides others.


Pirie adds that the Project Development and Facilitation Alliance (PDFA), Cesa’s Section 21 company established to assist local government in procuring the services of Cesa members for projects, has been parked. Cesa believes that the PDFA is part of the answer to public–private-sector challenges and it is exploring ways to put it to significant use.


Cesa is also working to fully understand how to effectively use framework agreements, alliancing and public–private partnerships in the South African context to enhance service delivery.

Edited by: Brindaveni Naidoo
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