Sep 19, 2012
Engineers see too few signs of SA’s infrastructure promiseBack
Construction|Engineering|Africa|Consulting|PROJECT|Water|Africa|South Africa|Contracting|Transport|Water Infrastructure|Consulting Engineers|Graham Pirie|Infrastructure|Power|Water|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 Consulting Engineers News
Consulting Engineers South Africa (Cesa) has announced the winners of the 2014 Aon Engineering Excellence Awards, which saw Aurecon, Aecom and Jeffares & Green take the top spots in this year’s various project categories. The yearly Aon awards, held in Midrand on...
While a survey of South Africa’s young consulting engineers has revealed a pessimistic perception of the industry, a clear message emerged at the Consulting Engineers South Africa (Cesa) Young Professionals Imbizo on Tuesday that the young engineers had to be their...
Following the launch of Consulting Engineers South Africa’s (Cesa’s) Sustainability Framework last year, it was likely that member firms would have until the 2015/16 financial year to start incorporating a simple sustainability report into their annual reports...
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 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 network, the funding and maintenance of these respective networks, and the push to move...
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.
This Week's Magazine
The multibillion-rand development of the Zendai Modderfontein New City, east of Johannesburg, will aim to exemplify an integrated city node, says property group Zendai South Africa COO Wenhui Du. The development will focus on the Modderfontein Gautrain station to be...
The South African Civil Aviation Authority (CAA) hopes to have finalised regulations for the flying of Unmanned Air Vehicles (UAVs) – also designated Remotely Piloted Air Systems (RPAS) and popularly called drones – in the country’s civilian airspace by the end...
Various stakeholders have expressed optimism that the Small Business Development Ministry, created after the national elections in May, will add much needed impetus to enterprise development in South Africa, where a strengthening of the entrepreneurial culture is...
Capturing and storing carbon dioxide (CO2) is the only way through which the world will achieve the lowest of the United Nations Framework Convention on Climate Change’s (UNFCCC) global warming predictions, called the representative concentration pathway (RCP) 2.6....
The City of Johannesburg has recovered R107-million following the arrest of 22 people allegedly involved in corruption, collusion, fraud and tampering with the city’s electricity systems, which had ultimately cost the city R200-million in lost revenue.