http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.31Change: 0.03
R/$ = 10.61Change: -0.01
Au 1307.26 $/ozChange: -5.37
Pt 1482.50 $/ozChange: -6.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jul 31, 2012

Integrated approach key to successful infrastructure development

Back
Construction|Africa|Consulting|Deloitte|PROJECT|Projects|Africa|Brazil|China|Egypt|India|Nigeria|Russia|South Africa|United States|USD|Appointed Contractor|Alan Richard|Andre Pottas|Andrew Mackie|Ebrahim Patel|Infrastructure|Michael Vincent|Sub-Saharan Africa
construction|africa-company|consulting-company|deloitte|project|projects|africa|brazil|china|egypt|india|nigeria|russia|south-africa|united-states|usd|appointed-contractor|alan-richard|andre-pottas|andrew-mackie|ebrahim-patel|infrastructure|michael-vincent|subsaharan-africa
© Reuse this



The growing number of infrastructure projects in South Africa, and the rest of Africa, as well as the need to attract investment have increased the pressure for timely and cost-effective delivery of projects.

But, with over 40% of global capital projects running over budget and past deadline, capital construction project owners needed to develop a more “owner-educated” and integrated approach to developing successful projects, advisory firm Deloitte construction advisory services director Alan Richard said on Tuesday.

Deloitte partner Andrew Mackie added that the interests and risk ratios of the project driver and appointed contractor should be fully aligned. He pointed to an example in which the owner placed significant risk on the contractor, but also offered significant gain share should the project be successful.

Richard believed that the development of the project owner’s understanding and involvement in the process could be the key to delivering successful projects.

The National Planning Commission, which is responsible for strategic planning for the country, also noted earlier this year that an integrated approach to infrastructure would achieve better outcomes.

In April, Economic Development Minister Ebrahim Patel commented that future public-private partnerships (PPPs) required an "equitable risk transfer" to the private sector, instead of previous models that placed the bulk of the risk on the public sector.

He called for dialogue on the appropriate structuring of PPPs, adding that there was an opportunity for the private sector to be integrated into the 17 strategic infrastructure projects contained in the Presidential Infrastrucutre Plan.

South Africa has earmarked public-sector projects totalling R844.5-billion in its medium-term framework, and R3.2-trillion infrastructure projects are under consideration for between 2012 and 2020. Only the most cost-effective projects providing long-term optimal benefits would be selected.

Deloitte director Andre Pottas commented that there continued to be a level of distrust between the public and private sectors. There was a lack of fully transparent PPP approaches as both parties held mutual suspicions.

Greater collaboration was required between government and the private sector as South Africa’s competiveness, even against other African countries, was decreasing, stressed Deloitte consulting director Michael Vincent.

Pottas noted that the country’s PPP model was evolving and that the National Treasury was taking larger risks with loosening its funding guidelines to increase projects’ attractiveness to potential funders.

He also suggested a “central oversight unit” should be established to coordinate, oversee and streamline all PPP projects.

Meanwhile, Pottas said that, with governments across the continent committing billions of dollars to infrastructure, Africa was at the start of a 20- to 30-year infrastructure development boom.

However, to overhaul sub-Saharan Africa’s infrastructure, about $93-billion a year was needed for the next ten years, compared with the current expenditure of $25-billion a year.

But, he noted, more private sector investment would be seen in Africa.

Richard pointed out that major investors were increasingly attracted to Africa, as Europe and the US failed to gain sufficient returns in their own market.

Despite global economy instability, major capital project players were still investing about 85% of their capital expenditure investment.

Besides a number of funding banks and investment firms taking up the challenge of infrastructure project investment, China-based companies and contractors either owned or were directly involved in 28% of the projects currently under way in Africa.

Further, newswire Reuters reported in April that the Brics group, comprising Brazil, Russia, India, China and South Africa, would establish a bank committed to funding infrastructure and acting as an alternate lender to the World Bank and other development finance bodies.

Private equity firm Actis also stated that it was aiming to invest $300-million a year in Africa, with the bulk of that in the continent's biggest economies, South Africa, Egypt and Nigeria.

It was also reported that South Africa's government pension fund Public Investment Corporation could invest up to $3.8-billion in private equity to boost its Africa exposure.
 

Edited by: Mariaan Webb
© Reuse this Comment Guidelines
 
 
 
 
 
 
 
 
Other Infrastructure News
The Vanderbijlpark plate mill, which is to be upgraded
Updated 4 hours ago Steel producer ArcelorMittal South Africa (AMSA) reports that it is planning an upgrade to its plate mill at Vanderbijlpark in quarter four 2014, which will enable it to produce heavy plates of up to 11 t for South Africa’s emerging wind-tower manufacturing...
Updated 4 hours ago 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’...
More
 
 
Latest News
Science and Technology Minister Naledi Pandor
Updated 29 minutes ago The Department of Science and Technology (DST) will have a budget of R6.47-billion for the financial year 2014/2015, it was reported on Tuesday. More than half of this (R3.5-billion), Science and Technology Minister Naledi Pandor noted in her budget speech to...
Updated 1 hour 5 minutes ago JSE-listed speciality chemicals group AECI on Tuesday announced that it expected to report higher earnings per share (EPS) and headline earnings per share (HEPS) for the six months ended June 30, mainly owing to the sale of the group’s surplus property assets at...
Updated 1 hour 18 minutes ago The affordability assessments undertaken by credit providers were set to be standardised, with the Department of Trade and Industry (DTI) planning to publish draft regulations for public comment at the end of July. As the over-indebtedness levels of South Africa’s...
More
 
 
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
Local aerospace company Denel Aerostructures (DAe), part of the State-owned Denel Group, has won a fourth contract to manufacture parts for the Airbus A400M military air transport and air-to-air refuelling aircraft. The new contract, which was won in an international...
Bob Skinstad
Although CEO Mark McChlery and chief marketing officer Bob Skinstad likened themselves to children in a playground when taking on the task of “reengineering and repositioning” the Seartec brand, the “young, dynamic and enthusiastic guys” were like proud...
An increasing number of buyers, in both the new and used car markets, are opting for finance structures that lower their monthly repayments, says asset financing company WesBank. These include the use of large balloon payments (also known as residuals), as well as...
Tertiary education institutions can use search engine giant Google’s Chromebook to provide secure mobile end-point devices for students on which they can share documents, work collaboratively on documents and access education materials and applications being used...
Local ceiling and partition company Abbeycon has beaten global competition at the Saint-Gobain Gypsum International Trophy competition, which was held last month in Berlin, Germany.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks