Aug 01, 2008
Engineering, construction industry grows despite global market volatilityBack
Construction|Engineering|Africa|Civils|Consulting|Education|Road|Roads|Africa|Angola|China|India|Mozambique|South Africa|United Arab Emirates|United States|Zimbabwe|Steel|Consulting Engineers|FIFA|South African Association Of Consulting Engineers|Graham Pirie|Infrastructure|R100|FIFA World Cup|World Cup
© Reuse this
Saace CEO Graham Pirie says that even though the local infrastructure roll-out programme and the infrastructure investments from emerging markets such as China were initiated before the period of global market volatility, infrastructure builds cannot be halted as they are vital to the economic growth of countries.
“Government’s commitment of R500-bil-lion, in addition to the money invested in the 2010 FIFA World Cup stadiums, to be spent over three years, means that 2010 is a small component of a larger investment that government is encouraging,” says Pirie.
He comments that the infrastructure roll-out programme is necessary, given the 20-year infrastructure investment backlog that South Africa needs to resolve.
Pirie says that events hosted in the country since 1994 have encouraged infrastructure reinvestment. “Prior to 1994, South Africa didn’t host sporting or political events that would draw an influx of tourists into the country, so the need for infrastructure reinvestment was minimal. “From 1994, with the 1995 rugby World Cup looming, government got serious about resolving this. Certain sporting events, such as the 1995 rugby World Cup, the 2003 cricket World Cup and the 2010 soccer World Cup, focus the right amount of attention on infras- tructure reinvestment at the right time,” says Pirie.
The foremost challenge is the skills crisis. “Because of the 20-year backlog of noninvestment, there was very little focus on building the country’s skills base. “South Africa started to feel the effects in 2005, but the real effects of the crisis are being felt now. Companies are realising that they have to work smarter in order to survive,” says Pirie.
There are a number of initiatives being rolled out to decrease the effects of the skills crisis. Pirie reports that one such initiative is the promotion of engineering as a lucrative career to pursue. “This is predominantly being promoted through the Young Engineers Forum, which is a forum made up of engineers between the ages of 20 and 35. “The Young Engineers Forum visits schools, promoting the selection of engineering as a career path,” says Pirie. He adds that, in the interim, South Africa is importing skills and enticing engineers out of retirement.
In addition, Pirie reports that the 470 Saace member companies currently contribute about R100-million a year towards education and training. Pirie further adds that, should government reinstate bursaries for study towards a career in the public sector, the skills crisis will improve considerably.
Estimations show that China’s consumption of steel, a key component in international infrastructure expansion programmes, will grow by 11,5% in 2008 and a further 10% in 2009, accounting for 35% of the world total in 2008. This is expected to reach 36,7% of world total by 2009. Indian steel forecasts show that apparent steel use will increase by 8,9% this year and a further 12,1% in 2009.
China and India are following the lead of the United Arab Emirates, a country that has seen a plethora of infrastructure expansion initiatives since 2000.
Pirie says that the quality of South African training and education in the past has placed South African consulting engineers and construction firms in high demand oversees.
Pirie reports that there has been a significant amount of capital investment in Africa, which is helping to drive infrastructure reinvestment on the continent. “One has to look at Mozambique and Angola and the transformation in those countries after the attainment of relative political stability,” says Pirie.
“Political stability plays an important role in infrastructure investment. “There is a feeling in the industry that if Zimbabwe can attain political stability, there will be a significant amount of post conflict reconstruction, which will present many opportunities to companies in that market,” says Pirie.
He adds that, in the past, companies found it easy to go into Africa and set up businesses, but found it difficult to move around Africa owing to inadequate road infrastructure.
Pirie says that one has to commend the efforts of the New Partnership for Africa’s Development (Nepad) for promoting interconnectivity within Africa.
“Nepad has done a significant amount of work in improving the state of the roads and related infrastructure so that companies operating in Africa are able to do so without any constraints,” concludes Pirie.
Edited by: Laura Tyrer© Reuse this Comment Guidelines (150 word limit)
Other Consulting Engineers News
Engineering consultancy Aurecon has been involved in three of this year’s South African Property Owners Association (Sapoa) Innovative Excellence in Property Development Awards, two of which were linked to the innovation category. During the award ceremony, which...
Updated 7 hours ago While the global economy continues to battle growth headwinds as it slowly emerges from a lingering post-recessionary phase, the greatest inhibitors to South African economic development are largely domestic and within government’s control, Finance Minister...
Updated 7 hours ago Building materials firm Infrasors said on Friday that FD Marius Potgieter, who had occupied the position since July 1, 2009, had tendered his resignation and would leave the company with immediate effect. Construction supplies manufacturer Afrimat FD and Infrasors...
Updated 7 hours ago Telecommunications group Telkom on Friday announced that, following extensive facilitated consultations and deliberations, management and organised labour had reached consensus that the company’s current restructuring process would proceed. “The parties have...
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
This Week's Magazine
South African construction company Group Five says work on the rehabilitation of the 800 km stretch of the Plumtree–Mutare highway, in Zimbabwe, should be completed by the end of this year. Giving evidence before the Parliamentary Porfolio Committee on Transport...
The Space Operations division of the South African National Space Agency (Sansa) revealed on July 17 that it had supported the successful launch of the US National Aeronautics and Space Administration’s Orbiting Carbon Observatory-2 (OCO-2) satellite on July 2. The...
Phase 1A of Johannesburg’s Rea Vaya bus rapid transit (BRT) system should carry around 42 000 people a day, while it was been expected that Phase 1B, rolled out last year, would add another 60 000 daily passengers. However, the entire system is currently carrying...
A stormwater project in Bedforview, east of Johannesburg, has stalled for eight months after project managers in the Ekurhuleni municipality resigned and municipal managers were placed on special leave without designating replacements. Construction to reinforce the...
The design of the Beit Bridge border post is the biggest impediment to efficient freight movement between Zimbabwe and South Africa, says Cross-border Road Transport Agency CEO Sipho Khumalo. Beit Bridge is the busiest border post in Africa. A research study on the...