Sep 19, 2012
Engineers see too few signs of SA’s infrastructure promiseBack
Construction|Engineering|Africa|Consulting|Environment|PROJECT|transport|Water|Africa|South Africa|Contracting|Water Infrastructure|Consulting Engineers|Graham Pirie|Infrastructure|Power|South Africa
© Reuse this
It also indicated that 63% of its 480 member firms expect capacity utilisation rates to remain unchanged for the coming six months, owing partly to a slower-than-expected pick up in public-sector workflow.
The South African government has indicated that it and its State-owned companies (SoCs) plan to invest about R860-billion on power, transport and water infrastructure over the three years from April 1, 2012 to March 31, 2015.
But while the South African Reserve Bank’s September Quarterly Bulletin showed a pick up in gross fixed expenditure to 5.7% as compared with 5.3% in the first quarter and 4.8% for 2011, the domestic construction sector continued to describe the environment as being weak.
As with the construction majors, Cesa members were, therefore, “looking north for work across our borders”, CEO Graham Pirie said.
The latest survey confirmed that the “industry is not firing on all cylinders”, that “government is not spending” and that “although there appears to be a lot of planning taking place the physical manifestation is just not happening”.
Conditions in the first six months of 2012 had been more difficult than expected, despite the fact that most of the larger firms had been busy during the period.
Fee income increased by 12% to an estimated R20-billion in the first six months of 2012, which was in line with expectations.
About 9.4% of fee earnings were outstanding for longer than 90 days, compared to 24% in December 2011 and 18% in the June 2011 survey. “This is the lowest rate since the December 2002 survey,” Pirie said, but still translated to an estimated R1.9-billion in outstanding fee earnings.
Overall confidence in the industry fell by 6.4% to 81.8 as at June 2012, from 87.4 in the last six months of 2011, but Pirie said firms were bullish that conditions would improve in the next 6 to 12 months.
Project postponements and delays in project implementation affected confidence in the contracting fraternity. Civil contracting confidence improved marginally to 34 and 38 in the first two quarters of 2012, but is still well below levels experienced between 2005 and 2008.
Cesa members indicated that unlocking greater private sector participation could be a critical element to fast-track and improve delivery.
The contribution by the private sector fell to 34.3% in the June 2012 survey, down from an average of 44.8% in 2011. Pirie said it was the lowest contribution by the private sector since 2005.
The contribution of SoCs improved to 20.5%, from an average of 13% in 2011, while the provincial government contribution rose to 14.3%, from an average of 9.7% in 2011.
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Economy News
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
The BMW Group will invest R6-billion at BMW Group South Africa’s (BMW SA’s) Rosslyn plant to produce the next-generation X3 sports-activity vehicle (SAV) for the local and export markets. Rosslyn will continue production of the current 3 Series through its lifecycle,...
The lack of consequences for poor performance and transgressions on the part of contractors remains a significant hurdle to tackling South Africa’s service delivery challenges, delegates heard at the Consulting Engineers South Africa Infrastructure Indaba, on...
City of Ekurhuleni executive mayor Mondli Gungubele earlier this month officially named the city’s bus rapid transit (BRT) system, Harambee.
About 58% of unstructured data stored by companies is dark data, which means that the value or regulatory importance of the data has not been determined. Subsequently, most of the stored data add costs, rather than increasing revenue or reduce regulatory risks, says...
Effective logistics, import/export and manufacturing consulting services require detailed industry knowledge and experience, but can add significant value to these industries by providing expert advice on various technical elements in their value chains, says...