Consultancy fees not always wasted expenditure

8th February 2013

By: Kelvin Kemm

  

Font size: - +

I saw a newspaper headline that screamed: ‘Consultants rake in billions’. The article was critical of government, claiming that money spent on consultants was largely ‘wasted expenditure’.

As a consultant myself, I had mixed feelings about this headline. My opinion is that, if government wants to improve its performance, then it must employ even more consultants.

Of course, consultants must be employed honestly and effectively. I am totally against crooked individuals organising consultancy contracts for unqualified people as a ruse to route taxpayers’ money to their buddies. This, sadly, does happen. Many tenders are just plain fraudulent, and others are carefully arranged so that only ‘friends’ win the tender.

I have experienced some of this myself, where I put in an honest tender, only to discover that a senior person from an opposition company had spent time with the CEO of the awarding company just hours before the tender deadline closed. I always believed that this practice is unethical and illegal. Then that company wins the tender and, later, I am told that the winning company offered extras that others and I were told not to include. Then they refuse to divulge what the extras were, and so it goes. The snag is that the ‘extras’ were never in the tender specification in the first place.

Good-quality consultants are valuable and will generally do a better job than most of government’s full-time employees. Why? Quite simple: to the consultant, time is money, so he or she will get on with the job and work all weekend, if need be. I often do.

Further, the consultant has a reputation to uphold, so he or she will try to deliver the best service possible.

Believe me, the cost to government of not employing the consultant would be much higher because the work would have to be carried out by in-house teams, which are often understaffed and underqualified.

A consultant can also rapidly pull in other experts, if the situation requires it. A full-time government staffer could not do that, so a critical job would either be glossed over or done by someone not really qualified or sufficiently experienced.

Another advantage of consultants is that they have generally had wide experience of other operations and can compare situations, with beneficial results.
I carry out strategic analyses for companies, government departments and other organisations. I have been in cement plants, electronics plants and gold, diamond and coal mines. I have worked with water purification and food processing companies. I have analysed a foreign reserve bank and worked for Standard Bank in a number of neighbouring countries. I have done work in Germany, the US, the UK, Lesotho, Sweden and more.

The upshot of all this is that I have seen many systems that work and those that do not. I also know how people’s minds work. Frequently, a problem that manifests itself as an engineering problem is not an engineering problem – it turns out to be a personality problem. Two fellows do not like each other and do not cooperate, the result being that an industrial plant runs below optimum performance. The company’s leaders assume that the engineering needs a revamp, when all it really needs is for two guys to shake hands and cooperate.

The human factor is a major issue. I was once brought into a case in which 11 people had died because someone overrode a safety device. A couple of fellows got files and screwdrivers and modified the safety device so that it would not work, and so save them the labour of resetting machinery when the safety system detected a reason to trip. The ‘modified safety’ worked just great for them – until it killed 11 people.

The company had omitted to design ‘a safety check on the safety check’, so the home-made modification was not detected until the newspapers found it.
I clearly remember the CEO pacing backwards and forwards in his office, saying: “It is now legally my responsibility and if I just fire the workers who did it, it will look like I found junior scapegoats to axe just to protect the good name of the company.” He was right.

On another occasion, when a mining wall collapsed at night, killing a number of people, it turned out that the emergency response procedure was vague with regard to whether the junior engineer on duty had the authority to call the CEO direct and to call the police, the fire brigade and others. I was asked to examine all that and to then write a new procedure.

Government should employ many more consultants, but they must be professional people of integrity and skill. In that way, taxpayers will get value for money.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION