The manner in which engineering companies tender for public construction projects is unsustainable and unnecessary, says South African Black Technical and Allied Careers Organisation (Sabtaco) president Clint Koopman.

“I don’t see a gun being held to our heads to tender at the rates that we do,” Koopman commented on the second day of the 2018 Infrastructure Indaba, hosted by Consulting Engineers South Africa.

He noted that when fee scales were first introduced they were considered a minimum, however, of late – likely because of the dearth of work – fee scales became “a ceiling”, as companies tried to submit tenders at the lowest possible price to try and increase the likelihood of securing a project.

Koopman pointed out that, despite engineering companies reducing their fees to unsustainable levels, tendering remains a largely unsuccessful endeavour, with companies generally being awarded one in twenty-five tenders.

Diminishing returns, combined with the high cost of labour, have jeopardised the sustainability of the consulting engineering sector, and Koopman noted that this was largely “a self-inflicted wound”.

Fee scales are a guideline used to assist the client in negotiating a fair price – not a requirement, Koopman pointed out. He added that engineering companies should set a new benchmark for fees that will enable them to be more competitive and that it was a simple matter of supply and demand.

Reiterating this sentiment was political analyst Ralph Mathekga who said engineering skills in South Africa are in short supply, with the sector growing at 2% year-on-year for the last 20 years, amid a climate where “big infrastructure projects are required for political survival.”

Mathekga further noted that the political uncertainty would prevail.

He cited the fact that land expropriation without compensation is now policy on the table brought by more a populist interest group within the African National Congress (ANC), but having been slackened by a technocratic interest group, as “President Ramaphosa noted that the implementation would occur in a way that doesn’t harm food security or the economy.”

Thus uncertainty around the timeframes and methodology of land expropriation would persist.

Further, Mathekga noted that the adoption of the “expropriation without compensation” mantra was an indication that the ANC is shifting towards populism, and expressed his concern that should the party – which he believes will win the next elections –  gain more than 60% in 2019, the shift will be even more excessive and will impact policy in an adverse way.

“Political parties with huge mandates move away from dialogue,” he cautioned, noting that controversial policy issues, such as transformation, nationalisation, procurement and issues pertaining to the structure and ambit of State-owned enterprises could worsen.

He concluded by noting that, as much as the perception of the government has improved with the removal of former President Jacob Zuma, Ramaphosa’s Cabinet reshuffle is a “crisis management Cabinet looking to keep the party from fracturing”, and that the newly elected President could find himself in the cold if he doesn’t manage the expectations of the factions within his party, and those of the electorate.