R/€ = 15.24Change: 0.00
R/$ = 14.41Change: -0.03
Au 1058.33 $/ozChange: 0.45
Pt 835.50 $/ozChange: 0.00
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?

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 Tenders Suppliers Directory Research Jobs Announcements Letters About Us
RSS Feed
Article   Comments   Other News   Research   Magazine  
Jul 31, 2012

Integrated approach key to successful infrastructure development

Construction|Africa|Consulting|Contractor|Deloitte|India|PROJECT|Projects|Africa|Brazil|China|Egypt|Nigeria|Russia|South Africa|United States|USD|Appointed Contractor|Services|Alan Richard|Andre Pottas|Andrew Mackie|Ebrahim Patel|Infrastructure|Michael Vincent|Sub-Saharan 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
Creamer Media Senior Researcher and Deputy Editor Online
© Reuse this Comment Guidelines (150 word limit)
Other Construction News
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...
TRANSPORT TRANSFORMATION The GO!Durban transit system will comprise metro rail transit, rapid bus transit, road-based feeder services and complementary rail and bus services
The implementation of new public transportation systems requires the consideration of the existing system and infrastructure requirements, while having the foresight to anticipate future system needs, says engineering, project and construction management services...
Construction work on the new Gauteng industrial development zone (IDZ), near the OR Tambo International Airport, has started, with civil engineering contractor Liviero at the end of October turning the first sod at the project.   The proposed IDZ is situated in...
Latest News
Updated 7 hours ago French conglomerate Bollore may have to halt work on the Niger to Benin section of its giant West Africa rail project after a rival company won a court order to stop it going ahead. The dispute concerns rival rail schemes in the area.
Updated 7 hours ago A week ahead of the second annual gathering of the Forum on China–Africa Cooperation (Focac), in Johannesburg, the JSE is rolling out the proverbial red carpet for Chinese investors looking to Africa’s largest bourse for possible investment opportunities, calling...
Updated 7 hours ago The South African National Roads Agency Limited (Sanral) applied for leave to appeal on Friday against the Western Cape High Court judgment that set aside the approvals that would enable it to toll sections of the N1 and N2 freeways in Cape Town. This prompted the...
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.
NICK CHRISTODOULOU As about 58% of data stored by organisations is dark, they must identify this dark data to expose risks and valuable information
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...
BRIAN VERWEY Effective management, review and administration of non-core elements can improve business operations and increase revenue and decrease unforeseen risks
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...
Alert Close
Embed Code Close
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
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96