Engineering News

A lack of adequate technical capacity in South Africa’s government departments is one of the most significant challenges currently facing the consulting engineering industry, says professional services firm Smec South Africa.

CEO Kostas Rontiris tells Engineering News that the company often undertakes projects where the scope of work is unclear, compounded by insufficient capital spent on infrastructure projects. Smec, therefore, often has to bid on a project without having a clear indication of the scope of work it would have to provide. He adds that the company tries to mitigate this challenge by building up client relations and defining the scope of work with the client from the initial meeting.

Rontiris also highlights a shortage of personnel with the required experience as another key challenge the industry faces. He notes that, while there are a fair number of engineering graduates in South Africa, they cannot be fully productive as they do not have adequate technical experience, which results in a gap in the market. Additionally, many engineers with 15 to 20 years’ experience have emigrated, further impacting on South Africa’s skills shortage.

Smec aims to mitigate the skills shortage by training graduate engineers. The company has a number of training programmes that specifically address the skills gap, in addition to the mentoring programmes leading to professional registration.

Rontiris adds that, while Smec prioritises the training of graduate engineers, the company has noted that younger engineers often move to different industries, such as the financial industry, for various reasons, including higher salaries.

He further stresses the industry’s needs for institutional reform to encourage the private sector to invest in infrastructure projects and suggests that government be more investor friendly in the infrastructure space.

As an international firm, Smec has been approached by several overseas funders and trusts, which it has introduced to the relevant government departments to stimulate business relations.

Trends
Rontiris notes that one of the latest trends in the consulting engineering industry is the creation of several smaller firms that have separated from larger firms. This is mostly a result of the new broad-based black economic- empowerment legislation, which has raised the definition of a qualifying small enterprise from a previous annual revenue of between R1.5-million and R11.5-million to an annual revenue of up to R50-million.

Currently, smaller engineering companies with staffs of 20, 30 or 40, which are black-owned, have an advantage over the generic big firms in the bidding stages “as they automatically qualify as a Level 2 contributor or better”, he says. Smec has noticed that, when it tenders for contracts, a number of these firms have been created .

The company has mitigated this challenge by adhering to its management policies and focusing on any infrastructure project where it can add value, rather than being very selective in specific niche markets.

“We are still focusing on the bulk infrastructure market at government level, targeting national, provincial and munici- pal projects. Subsequently, the bulk of our projects are in the medium-sized project category, which still provides us with the necessary turnover,” explains Rontiris.

In future

, Smec will continue to bid for projects at government levels, and also keep expanding into the rest of Africa, as it has the advantage of having more than 400 people already stationed in the various African countries.

Smec

currently focuses on Tanzania, Kenya, Rwanda and Uganda, in East Africa; Ghana and Nigeria in West Africa; and Southern African Development Community countries.

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in the past year, Smec managed to double its revenue from African projects and predicts that this trend will continue for the remainder of this year.

“We have established offices and local personnel in all these countries, which was also one of our successes over the last year,” says Rontiris.