http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.06Change: -0.14
R/$ = 11.66Change: -0.12
Au 1213.36 $/ozChange: -4.14
Pt 1189.50 $/ozChange: -1.00
 
 
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 Tenders Suppliers Directory Research Jobs Announcements Letters 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|Services|Alan Richard|Andre Pottas|Andrew Mackie|Ebrahim Patel|Infrastructure|Michael Vincent|Sub-Saharan Africa
Construction|Africa|Consulting|PROJECT|Projects|Africa|||Services|Infrastructure||
construction|africa-company|consulting-company|deloitte|project|projects|africa|brazil|china|egypt|india|nigeria|russia|south-africa|united-states|usd|appointed-contractor|services|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 (150 word limit)
 
 
 
 
 
 
 
 
Other Infrastructure News
The Gauteng Provincial Government has outlined plans to develop a handful of “mega” human settlements as part of an ambitious long-term housing development strategy aimed at narrowing the housing backlog, with plans afoot to replace informal settlements with...
The Transnet National Ports Authority (TNPA) was committed to spending R17-billion on infrastructure upgrades at the Port of Durban by 2023. In a briefing on current projects that had begun or were about to get under way at the port, Port of Durban manager Moshe...
China’s investment in African resources remains at a relatively early stage and is likely to increase further over the next decade, despite the economic slowdown in the world’s second-largest economy, reports South African financier Standard Bank. China’s economy...
More
 
 
Latest News
Salani Sithole
International consulting engineering company Royal HaskoningDHV (RHDHV) has appointed Salani Sithole as South African MD, effective March 1. Sithole has been with the company for six years and, prior to joining RHDHV, held various positions in engineering consulting,...
The Gauteng Provincial Government has outlined plans to develop a handful of “mega” human settlements as part of an ambitious long-term housing development strategy aimed at narrowing the housing backlog, with plans afoot to replace informal settlements with...
Eskom power stations
While State-owned power utility Eskom was unable to cut off electricity supply to some of its neighbouring trade partners, it was able to reduce energy exports by 10% when load shedding was implemented locally. The Department of Public Enterprise explained that Eskom...
More
 
 
Recent Research Reports
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
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 road...
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.
 
 
 
 
 
This Week's Magazine
National flag carrier South African Airways (SAA) is in an advanced stage of renegotiating its deal with European airliner manufacturer Airbus to acquire A320 single-aisle (or narrow body) aircraft. The aim is to replace ten of the aircraft still on order with five...
Worldwide, the main thrust in the ports industry over the past decade or more has been to increase efficiency. Traditionally, ports have been run by engineers and mariners and, in the past, increasing a port’s capacity was achieved by expanding the harbour. “That has...
What do you do when an elephant has a toothache? You call Dr Gerhard Steenkamp from the University of Pretoria’s (UP’s) faculty of veterinary science, Onderstepoort, one of only two elephant ‘dentists’ in the world.
The 2015 Sanlam/Business Partners Entrepreneur of the Year (EOY) competition was launched earlier this month in Johannesburg, with the main focus on creating and inspiring entrepreneurs to create jobs and boost the economy.
In a recent letter to the editor that I sent to Engineering News (Concerns regarding South African portion of Square Kilometre Array) and in a follow-up article elaborating further (We must start preparations to build our own synchrotron light source), I stated my...
 
 
 
 
 
 
 
 
 
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
Subscribe Now for $96 Close
Subscribe Now for $96