Commenting on President Cyril Ramaphosa’s economic stimulus and recovery package, Consulting Engineers South Africa (Cesa) has reiterated that proper management of public funds will be critical to deriving true value for money.
CEO Chris Campbell said in a statement that, over the past few years, Cesa had been partnering with government to assist and advise the public sector on maximising its investment in infrastructure and ensuring that the correct capacity was in place to design and implement large-scale, durable projects.
He added that the first step in the economic stimulus process would have to be rooting out corruption where it was still taking place.
“While blatant corruption is bad, appointing companies for infrastructure projects that lack both the capacity and expertise and simply sell on projects, adding no value to the process, is equally bad.
“We would argue that this is tantamount to fronting and defeats the objective of developing future capacity in the consulting engineering industry as part of a credible transformation process for our industry,” he said.
Public-sector investment in infrastructure was often an investment of no less than a 30-year period, sometimes in excess of 50 years, especially with regard to large-scale road, bridge and dam construction projects.
The upfront planning and design phases could take between three and five years before construction started and the relative life-cycle cost contribution to the infrastructure investment was as little as 3%.
The next stage – construction – constituted a cost contribution of 20% and might take place over three to five years.
Therefore, after a period of six to ten years, an investment of up to 23% of the total cost of ownership would have been expended even before the infrastructure had been rendered available for use, said Campbell.
He explained that public-sector entities were then left with an asset which was meant to last for at least 30 years, provided that it was correctly used and regularly maintained. The latter was known as the operation and maintenance phase.
This phase, in reality, constituted the remaining 77% of the total cost of ownership in the investment process.
“Our current public infrastructure procurement process counterintuitively drives costs down in the 3% area when appointing consulting engineering professional service providers and seems to be oblivious to the opportunity to rather invest more in this phase so that the best professional service providers can maximise the quality of service that would derive savings in the remaining 97% cost component of the investment.”
Campbell suggested appointing recognised companies with the appropriate expertise and capacity to do the upfront engineering, planning and design as a first step towards stemming the tide against bogus service providers.
Then, he said, it was necessary to optimise money infrastructure investment from a total cost of ownership perspective in infrastructure, which started with the 3% invested in the procurement of the appropriate consulting engineering services.
Cesa was aware of the capacity challenges and the dire shortage of procurement practitioners in the public sector who understood the difference between procuring for infrastructure development and general procurement.
“It is for this reason that we volunteered a . . . partnership with the State shortly after the President made his ‘Thuma Mina’ address during his inauguration earlier this year.
“Unless we act to correct this flawed process, we will not, as a country, [afford] to . . . operate and maintain these assets optimally, as potential ‘in-built’ shortcomings through cheap designs, poor equipment choices and lack of quality supervision during construction will mean more frequent maintenance at higher cost to operations or simply that maintenance will be deferred or not done,” noted Campbell.
Cesa would instead advocate for a more informed and holistic approach to be adopted, one that drove investment in infrastructure with a “long game” vision, to use a good golf analogy.
“We need to drive this in a manner that ensures that future generations are not saddled with the plague of early failure of functional infrastructure or unsafe infrastructure and the continuous challenge of rebuilding what should have been lasting infrastructure.”
Additionally, spending responsibly would enable more infrastructure delivery at a time when the need for functional and lasting infrastructure was growing daily.