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<?xml version="1.0" encoding="utf-8"?><Search><pages Count="16"><page Index="1"><![CDATA[ 1 ]]></page><page Index="2"><![CDATA[ Contents Contents - On the Inside CESA Continues to Urge President Zuma to Rigorously Accelerate Implementation of NDP 3 Critical Need for Local Government to Work Closely with Consulting Engineers 4 CESA warns Unscrupulous and Unqualified Contractors and Corrupt Officials 5 CESA Economic Growth better than Expected 6 Consulting Engineers not a Commodity but Trusted Advisor 9 Presidential Visits 10 Infrastructure Procurement Civilution 12 Congratulations! BCE Graduation Ceremony 13 News from Aon 14 Events Calendar 2014 16 (Back Cover) 2 ]]></page><page Index="3"><![CDATA[ CESA Continues to Urge President Zuma to Rigorously Accelerate Implementation of NDP ESA is pleased that President Jacob Zuma CESA is committed to partnering and working in his opening statements in his State of the with Government to design new infrastructure CNation Address (SONA) made mention that and maintain existing infrastructure as well as the National Development Plan (NDP) is key to addressing challenges that affect the consulting growing the economy of the country and addressing engineering sector. CESA commends President the three triple challenges of unemployment, Zuma for initiating the Presidential/Business poverty and inequality. Bilateral for Inclusive Growth. The NDP was created This initiative shows that the in order to develop President has the foresight South Africa’s economy. to institute elements that can Government through propel the economy of South the NDP has identified Africa forward by inviting infrastructure development business to work together as key to the socio economic with Government in bringing development of the country forward solutions to overcome and CESA strongly believes impediments to successful that its objectives will never business investment and come to fruition unless there providing a conducive is involvement of consulting business environment. This engineers at the forefront of will undoubtedly increase this development. investor confidence in South Africa and is a sure way If we are serious about to succeed in achieving moving the country forward, the objectives of the NDP. it is time to bring those 18 CESA urges the President Strategic Infrastructure to continue in his fifth term Projects on stream. CESA of administration with regular is looking forward with interaction with business eagerness to the roll out sector through this great of these projects so that initiative and dispel the consulting engineering firms negative critique by those will contribute in designing who wish to see the NDP fail. world class structures that will stand the test of time to improve the quality of life of the people of Education is another challenge facing the industry. the country. CESA urges the strengthening of the Basic education is key to the development of Presidential Infrastructure Coordinating Committee mathematics and science capabilities within the by introducing a Public Private Partnership of a country forming the foundation required for the difference, not at the transactional level but at development of engineers. CESA proposes that Project Development, Facilitation & Monitoring English Higher Grade be introduced at Primary Agency level. schools as it underpins better understanding of Mathematics and Science. CESA recommends that this Agency be formed below the secretariat level of the Presidential CESA is also looking forward to Government Infrastructure Coordinating Committee and must charting the way by outlining bold steps to deal with have dual reporting responsibility to Government the current procurement regime, corruption, as well as well as Business through the various business as the regulatory framework that is constraining representative bodies (BUSA, BBC, BLSA, CESA, member firms in practicing their profession as well SABTACO, etc.). as how their services are procured. 3 ]]></page><page Index="4"><![CDATA[ Critical Need for Local Government to Work Closely with Consulting Engineers The issue of incapacity in the 3 spheres of local consulting engineering skills complemented Government is most prevalent at local government by International partnerships are acquired and level. This year marks the anniversary of the 20th effectively utilized to assist municipalities with their Democratic Government of the Republic of South infrastructure build programme. Africa and time has shown through numerous service delivery protests that more still needs to be It is CESA’s greatest belief that charity begins at done to achieve universal access to basic services home. This means that local consulting engineering for communities. The Constitution stipulates the skills must be harnessed and utilized for local main objectives of the local government system infrastructure projects. It is therefore our calling are: (1) providing democratic and accountable that South African based Consulting Engineering government, (2) ensuring the provision of services firms be given priority when selecting consulting to communities in a sustainable manner, (3) engineering services by both the public and private promoting social and economic development, (4) sector clients. This is not exclusive of international promoting a safe and healthy environment, (5) firms who are registered and paying tax in South and encouraging the involvement of communities Africa. CESA regards itself as an independent and community organizations in local government. self-regulator for Consulting Engineering work in Clearly objectives (2) & (4) call for a substantial South Africa to ensure that fairness, equity and contribution from the engineering profession hence quality of service is achieved to the benefit of the the critical need for Local Government to work closer Client and ultimately to the benefit of the South with Consulting Engineering representative bodies African public. We encourage all practitioners so as to enable participation of the profession in the of consulting engineering services to become a planning and design of the infrastructure projects. member of CESA so as to effectively regulate the conduct of this profession. This goes a long way in Integrated development planning (IDP) is seen ensuring that South Africa becomes a responsible as a mechanism to enable prioritisation and developmental state that ensures the development integration in the municipal planning process. and sustainability of the engineering profession. Integrated Development Plans (IDPs) and Local CESA member firms provide a fertile and Economic Development (LED) Strategies are conducive environment to train and develop this important tools utilized by Municipalities in driving critical consulting engineering skill and profession economic development at the local level. In order to create a sufficient pool for the benefit of our to be effective they need to take into account government. the resources and capacity that is available. Liaising with Districts, Provinces, National or CESA is currently involved in numerous initiatives Provincial Government is a common route but to inform the client market about the importance closer collaboration with Consulting Engineering of forming collaborations and partnerships for and other Business Representative bodies must the benefit of working together to sustaining the be explored by Municipalities in order to ensure consulting engineering profession and how the that they tap into competent Engineering skills for procurement system can be harmonized to enable effective Infrastructure planning and development. the success of this necessary partnership. It is only Consulting Engineers are at the forefront of any through working together and fully understanding infrastructure development project and without this the importance of this profession that effective critical skill there can never be any procurement, service delivery through quality infrastructure construction, operation and maintenance of any development can be achieved. We prioritise local infrastructure asset. government as the third tier of government because this is where interface with the populace is achieved, CESA is making every effort to ensure that the public this is where the infrastructure and service delivery sector in general, but especially local government is tangible and experienced by communities. It is becomes an informed client by our initiatives of through infrastructure development that the doors forging partnerships and collaboration with all of economic investment are opened and business municipalities in South Africa. This will ensure that confidence is boosted. 4 ]]></page><page Index="5"><![CDATA[ CESA warns Unscrupulous and Unqualified Contractors and Corrupt Officials CESA is appalled by the pressure put on members to certify payment for work not done and will not bow to pressure from greedy, unscrupulous and unqualified contractors and corrupt officials. We are concerned and as an organisation that represents this invaluable profession which is the backbone of quality infrastructure, we cannot accept this despicable behaviour and conduct to continue unchallenged, states CESA CEO Lefadi Makibinyane. CESA will not allow these bad elements to hold the profession to ransom or deter members from practising their profession. Their actions are denying our people a better life through the delivery of basic services and critical infrastructure underpinning economic growth and job creation. Government has done everything to prepare internationally acclaimed policies but implementation has been their Achilles Heel mainly due to unscrupulous officials who are eroding the profitability of, not only CESA member firms, but most companies doing business with government, especially municipalities where the rot lies. Governance in most municipalities in the country is in shambles and is worsened by the political interference in administration. CESA will be relentless in holding those in power accountable to ensure that the quality of basic services through effective and efficient infrastructure delivery to the people of South Africa. CESA will work closely with government institutions to ensure that these corrupt acts are identified and perpetrators reported to the South African Police Services, the Public Protector, the Special Investigative Unit and National Treasury, for further investigation and prosecution. 5 ]]></page><page Index="6"><![CDATA[ CESA Economic Growth better than Expected CESA’s latest Bi-annual Economic and Capacity of 2014, compared to the last six months of 2013, Survey (BECS) for July to December 2013 indicates which would then translate into a 14 percent conditions during 2013 continued to surprise firms. increase (allowing for a 6% inflationary cost Following on a ‘better than expected’ first six months increase) compared to the first six months of 2013. of 2013 the second half of 2013 also surprised on the upside. The confidence index for the last six A concern is that about 23 percent of fee earnings months was revised from an expected level of 85.0 were outstanding for longer than 90 days, including to 98.1, as conditions were better than expected. income outstanding from foreign clients, compared The more upbeat sentiment is maintained for the to 9, 9 percent in the June 2013 survey and 8,3 next 12 months, averaging 98.3 for the first six percent in the December 2012. This translates to months of 2014 and 98.5 for the last six months of an estimated R5billion outstanding in fee earnings. 2014. The current level is at its best since 2008/09. Industry Equity Real gross fixed capital formation increased by Compared to the same period in 2012, employment 4,7 percent y/y in 2013, from 4,4 percent in 2012. in general was up by 26 percent, which is an This is higher than original forecasts which were increase of 5 122 people. The appointment of estimated at 3,2 percent. A modest improvement Black Executive staff (including Black, Asian and in investment by private business enterprises was Coloured), measured by the contribution of black offset by lower growth in public corporations and executive directors, non-executive directors, general government. Investment growth is expected members and partners as a percentage of total to continue to surpass GDP growth, projected to executive staff, increased to 35,8 percent from increase by between 4 and 5 percent over the next 35,5 percent, 30,1 percent and 28,1 percent in the two years. Gross fixed capital formation (GFCF) as previous three surveys. This shows real significant a percentage of GDP increased to an average of progress in terms of industry transformation. 22,9 percent in 2013, from 22,3 percent in 2012, The employment of African (Black, Coloured and mainly due to an improvement in investment of Asian) professional engineers fell by 1,6 percent machinery and equipment, which increased by 10 in December 2013 vs. the first six months of 2013, percent in 2013 and transport equipment which but as compared to the same period in 2012, increased by 2,0 percent. The NDP has set a increased by 21 percent. target of 30 percent contribution of GFCF to GDP by 2030. Capacity Utilisation Capacity levels stabilised at 91 percent over the Fee Income last two surveys, after deteriorating to a level of Fee earnings accelerated at a faster than expected 87 percent in 2012. A level of 91 percent is so far pace, up 9 percent in the last six months of 2013, the highest level reported by participating firms compared to earnings in the first six months of since the December 2008 survey when it was at 2013, against an expected ‘flat growth’, or ‘no 95 percent. Fewer firms expect to further increase change’ scenario. Fee income increased to R22,3 capacity, 15 percent compared to 27 percent in the billion, annualised, current prices as at December previous survey. 2013. Industry Challenges Following the 9 percent nominal increase in Unrealistic tendering fees remain a concern for earnings, real growth increased by 10,3 percent members, while the extended time it takes in compared to the same period in 2013. This is the which to finalise a proposal is affecting profitability strongest real growth in earnings since the 44 in the industry. In addition to this the quality of percent increase reported in the last six months technical personnel is argued by some firms to of 2008. Firms further expect growth in earnings have deteriorated, putting greater risk on the built to accelerate by 11 percent in the first six months environment sector. 6 ]]></page><page Index="7"><![CDATA[ Fraud and corruption is affecting the ethos of government tenders and procurement continues our society, with a lot of talk and little action to threaten the standard and performance of the accompanying the growing evidence of corruption. industry. Non-CESA members do not seem to CESA established an R1million anticorruption comply with the same standards and principles as fund in order to pro-actively prevent tendering those firms that are members of CESA. Firms from irregularities experienced by members. CESA across South African borders are tendering at rates members are required to raise any observed tender that are not competitive for local firms. Complaints irregularities, especially at the tender specifications have been received of some of these firms not as advertised, to CESA who immediately contacts producing proper drawings and not attending site the concerned client to influence withdrawal of the visits. Clients need to be more vigilant to request tender, rectify the irregularity and re-advertise. It is a high standard in line with what CESA advocates CESA’s CEO, Lefadi Makibinyane’s strong belief as a self-regulator of the Consulting Engineering that prevention is better than cure. CESA as a services, to ensure that proper procurement trusted advisor understands that it also has to be a processes are followed to eliminate the risk of trusted partner to its clients, with clear recognition awarding contracts to “unscrupulous” firms. While that infrastructure delivery cannot be further these occurrences may be limited to smaller rural delayed by issues of tender irregularities that are areas, it remains an unacceptable practice. Clients fought at courts on protracted litigation suites. can be assured of the quality of service through the CESA is also engaging with National Treasury to appointment of Consulting Engineering firms that include the concept of an integrity pact into the are members of CESA because it promotes the Public Finance Management Act and the Municipal highest level of professional conduct, adherence Finance Management Act. to highest quality management standard, ethical conduct and management integrity amongst its Unlocking greater private sector participation is members, ensuring that the client receives the seen as a critical element to fast track delivery best solution measured against cost and quality. which will support engineering fees and as such engineering development in the industry. Private Lack of attention to the maintenance of infrastructure sector participation in this context refers to poses a serious problem for the industry. Not only involvement on a more technical level (and not is it much more costly to build new infrastructure, as a client), to improve municipal capacity and but dilapidated infrastructure hampers economic efficiency. growth potential. The cost of resurfacing a road after seven years at current prices, is estimated Service delivery, especially at municipal level at R175 000 per kilometre, compared to R3million remains a critical burning issue. The consulting per kilometre to rebuild, less than 6% of the engineering industry is threatened by incapacitated construction price. In many cases, infrastructure is local and provincial governments. Public sector left to deteriorate to such a state, that maintenance and these two tiers of Government in particular, becomes almost impossible. as major clients to the consulting engineering industry, are called upon to become more effective, A further challenge to the industry is to find a more proactive in identifying needs and priorities way to standardize the procurement procedures and more efficient in project implementation and applied by the different government departments. management. Pravin Gordhan made it very clear Procurement procedures should be standard for the that under spending of infrastructure budgets country, or at least for the specific tier of government. is a serious concern for the industry, where only We are however encouraged by the good work by R177billion of the R266billion was spent during the cidb in formulating the procurement standards 2010/11. within the construction industry which will also cover the work of Built Environment Professionals, The involvement of non-CESA members in concludes Makibinyane. 7 ]]></page><page Index="8"><![CDATA[ 8 ]]></page><page Index="9"><![CDATA[ Consulting Engineers not a Commodity but Trusted Advisor CESA President Abe Thela says that consulting and contributes to economic growth, stimulates engineering services are neither a commodity nor the development of other economic sectors and contracting. Thela states that consulting engineers attracts foreign investment. provide independent advice to clients, offer technical advice in the procurement of contractors He stressed that price is not an appropriate basis as well as design and supervision of construction for competing for consulting engineering services work. “This role can only be played by a ‘trusted because it reduces the profession to a commodity advisor’”. which is demand driven and compromises the ability of the profession to In clarifying his point, he innovate, train staff and points out that a commodity attract young engineers to is a useful thing, an article the profession. of trade, a product, a raw material, primary agricultural The price driven product that can be bought procurement of consulting or sold, such as copper engineering services or coffee. In economics, a commodify consulting commodity is a marketable engineering services and item produced to satisfy relegates the relationship wants and needs. from that of ‘Trusted Advisor’ status to ‘contracting’. While a contractor is an This encourages business independent entity that survival strategies associated agrees to furnish a certain with contracting such as number or quantity of variation orders for any goods, material, equipment, additional work not part of the personnel, and/or services original appointment - which that meet or exceed stated threatens the sustainability requirements or specifications, at a mutually of the sector and has a negative impact in terms agreed upon price and within a specified timeframe of the provision of infrastructure. The current to another independent entity called a project procurement environment is complex and politically owner (employer). sensitive and must be treated with due care, and urgency it so much deserves, cautioned Thela. Engineering and construction work is a provision of a combination of goods and services arranged CESA proposes the reintroduction of quality as for the development and provision of an asset part of the total procurement point’s calculation or refurbishment of an existing asset, including alongside price and Broad Based Black building and engineering infrastructure. Economic Empowerment Construction Industry Development Board Method for routine projects Thela states that consulting engineers provide as well as the separation of procurement of independent advice to clients, offer technical Built Environment Professional (BEPs) from the advice in the procurement of contractors as well procurement of general goods and services. as design and supervision of construction work. He added that CESA also proposes that BEPs’ “This role can only be played by a ‘trusted advisor’. services are designated as local because it Consulting engineers are designers who create will encourage the use of local companies over infrastructure projects that generate employment international companies without a presence in opportunities for millions of unskilled, semi-skilled South Africa, which will contributes to the growth and skilled workers improving the quality of life and development of the sector. of citizens. This impacts positively on inequity 9 ]]></page><page Index="10"><![CDATA[ Presidential Visits Sustaining Consulting Engineering is Key to Growing the Economy CESA’s President, Abe Thela, is in the process of visiting all of the organisations regions to present his 2014 theme of ‘Sustaining Consulting Engineering is Key to Growing the Economy’. He states that the National Development Plan (NDP) was created in order to develop the South Africa’s economy. Government through the NDP has identified infrastructure development as key to the socio economic development of the country. Thela believes that the NDP and its objectives will never come to fruition unless there is involvement of consulting engineers at the forefront of this development. Eastern Cape Border Presidential Visit Gauteng North and South Presidential Visit 10 ]]></page><page Index="11"><![CDATA[ KwaZulu-Natal Presidential Visit Northern Cape Presidential Visit Eastern Cape Port Elizabeth Presidential Visit 11 ]]></page><page Index="12"><![CDATA[ Infrastructure Procurement Civilution During the Civilution Congress, CESA was afforded the opportunity to convene a session entitled ‘Infrastructure Procurement Civilution’ – A CODESA of infrastructure procurement. The session was attended by more than eight clients, eight contractors and about 65 engineers. Some delegates wanted to hear consulting engineers elaborate on what they would like to see as the ideal state of procurement and urged engineers to be pragmatic in their proposals. CESA President Abe Thela stated the role of consulting engineers and expressed the thought that the perception of consulting engineers should be that of a trusted advisor. Looking at the current procurement approach, he mentioned that this is dominated by price while quality is a threshold value only and questioned whether this was adequate. Thela pointed out that this current state reduced consulting engineering services to a commodity level and compromised engineers’ ability to: innovate, train staff and attract young engineers into the industry. Dr. Ron Watermeyer stressed the value for money concept in his presentation and outlined the gap between the achieved and expected outcomes and discussed the root causes for the lack of success. He highlighted an issue that needed addressing was that the universities are still teaching traditional models of procurement when so many innovative and accepted models are being practiced. He added that since 2008 he has been involved in major capital expenditure programmes at Wits University using innovative and modern models of procurement resulting in cost overruns of less than 5%. Prof. Wellington Dididhuku Thwala said that Infrastructure provision must be in the best interests of the public and infrastructure maintenance must be prioritised. The source of unnecessary money must be established prior to sanctioning of infrastructure projects. Infrastructure should be fair and reasonable, cost effective, safe, user friendly and reliable from a public point of view. The payment period of the funding should be appropriate to the life of the infrastructure and the role of the professional councils is to protect the public. World leading contractors and builders put their trust in our wide range of strong, durable and high quality products. In South Africa, Lafarge manufactures and supplies cement, aggregates, readymixed concrete, gypsum plasterboard and interior building fttings. 12 Building with Lafarge means you can Build Better Stronger. Lafarge South Africa Tel: 011 657 0000 Fax: 086 631 0006 www.lafarge.co.za ]]></page><page Index="13"><![CDATA[ Congratulations! BCE Graduation Ceremony Top row L-R: Brenda Lacey-Smith, Tafadzwa Mukwena, Vaughan Taylor, Vinesh Maharaj, Rowland Burke, Kwanele Mafu, Ruan van den Berg, Celia Mullane Front row L-R: Noqobo Bongoza, Mpho Mathelele, Jeshika Ramchund-Moonsamy CESA Aon Engineering Excellence Awards 2013 Category: Projects between R50 Million and R250 Million Winner: AURECON for the Mayfair on the Lake Office Building for Growthpoint Properties 13 ]]></page><page Index="14"><![CDATA[ News from Aon: Reports of Car Remote Jamming on the Rise Again Incidents of car remote jamming are on the increase again and it seems as if criminals are not holding back on when and where they target their victims. Even crowded parking lots and public areas are no deterrent for criminals who can empty a parked vehicle of its valuables in a matter of seconds. Aon South Africa, insurance brokerage and risk advisors reports that its call centre receives numerous reports from clients who have fallen victim to the jamming scam. Mandy Barrett of Aon South Africa explains how car remote jamming works: Remote jamming involves the blocking of car remotes using a household remote. Both remotes operate at a 400 megahertz frequency and criminals prevent the locking action of the car from being activated. They then have easy access to the vehicle and your valuables without any forced entry. Areas being targeted include parking lots at schools and service stations as most people leave valuables such as handbags, wallets, iPads and laptops in their cars while they walk their children into school or buy a snack at the forecourt store. Shopping centres are also a favourite hunting ground. Criminals are usually parked close by looking for targets, and casually walk up and help themselves, in most instances not even drawing anyone’s attention,” warns Mandy. Your only real defense against falling victim to remote jamming is to mitigate your risk by being aware of the practice and personally checking that your doors are locked. Make sure you hear the beep of your alarm system and the audible sound of the locking mechanism. Then physically check your doors and boot to make sure. The reality is that jamming is being executed by professional gangs and motorists will need to remain vigilant to prevent falling victim to this scam. Call in the experts partner with Aon today: 0860 100 404 SMS Professional to 31762 and we will call you back* quoteme@aon.co.za aon.co.za #AskAon 14 14 ]]></page><page Index="15"><![CDATA[ 15 ]]></page><page Index="16"><![CDATA[ Events Calendar 2014 Date Event Presidential Visits th 24 July Northern Province th 25 July Mpumalanga th 30 July Procurement Indaba th 7 August North West Province Western Cape - Annual Consultants Relay TBA KwaZulu-Natal - Annual Consultants Relay June & July Job Shadow Initiative th th 11 & 12 August YPF Imbizo th 12 August CESA Aon Engineering Excellence Awards rd 23 August CESA Relay th 6 October Presidential Golf Challenge Johannesburg th th 9 - 11 November Annual Conference and Exhibition (Safari Resort, Entabeni Safari Conservancy, Waterberg Region, Limpopo) Other Industry Events th st 28 Sept - 1 Oct FIDIC (Rio de Janero) th th 16 -18 October GBCSA Conference (Cape Town) st th 29 - 31 October IMESA Conference (Durban) TBA Youth in Construction SALGA (The South African Local Government Association) TBA National Conference TBA IMFO (The Institute of Municipal Finance Officers) TBA iLGM (Institute for Local Government Management) Consulting Engineers South Africa (CESA) Fulham House PO Box 68482 Hampton Park North Bryanston 20 Georgian Crescent Johannesburg Bryanston South Africa Johannesburg 2021 South Africa Tel: +27 (011) 463 2022 Fax: +27 (011) 463 7383 Email: general@cesa.co.za Website: www.cesa.co.za Inside Track is published by Consulting Engineers South Africa (CESA), a non profit organisation sponsored by its members to serve all stakeholders in the business of Consulting Engineering and Infrastructure Development. No articles, extracts, photographs or other elements of this publication may be reproduced in any form whatsoever without the written permission of Consulting Engineers South Africa. Editorial board: Lefadi Makibinyane and Dennis Ndaba Written and edited by: SW Marketing Graphic design by: Yen Designs (1413) ]]></page></pages></Search>