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PARTNERING FOR GROWTH Working together towards a sustainable future Northwest Province 23 June 2011

PARTNERING FOR GROWTH Working together towards a sustainable future Northwest Province 23 June 2011. CONTENTS. 1.INTRODUCTION 2. 2010 OVERVIEW The Construction Economy CESA: Consulting Engineers South Africa Industry Issues and Events Non-events 3. THE WAY FORWARD: 2011 & BEYOND

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PARTNERING FOR GROWTH Working together towards a sustainable future Northwest Province 23 June 2011

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  1. PARTNERING FOR GROWTH Working together towards a sustainable future Northwest Province 23 June 2011

  2. CONTENTS 1.INTRODUCTION 2. 2010 OVERVIEW • The Construction Economy • CESA: Consulting Engineers South Africa • Industry Issues and Events • Non-events 3. THE WAY FORWARD: 2011 & BEYOND • Global Trends • Economic Growth Path • Service Delivery Framework

  3. INTRODUCTION • Spotlight on Infrastructure/service delivery challenges • T Manual : “Fail to deliver services despite adequate funding” CESA • 2009 : Talk 2010 : Walk 2011 : Work • Focus on participating to grow SA • “PARTNERING FOR GROWTH”

  4. 2010 Construction Economy

  5. 2010 Construction Economy

  6. Industry Confidence Source: CESA BECS, BER

  7. Fee income earned by Sub-disciplines: % ShareDecember 2010 Question: What type of work did your company engage in during the past 6 months? Source: CESA BECS

  8. Fee earnings by sector: Market Share Dominated by transport and commercial sector

  9. Provincial Market Share: December 2010 Vs change in market share from December 2009 Income distribution per province GAIN market share

  10. Fee income earned by type of client % Share Local (SA) Income distribution per fee paying client type, during the past 6 months

  11. Competition in tendering During July – December 2010 competition for work was (Tick selection)

  12. Bursaries % of Salary / Wage bill

  13. Training (Direct costs) % of Payroll

  14. Industry Capacity Utilisation Of existing technical staff

  15. Fee income outstanding for more than 90 days (including foreign fee income earnings)

  16. Quality Management System

  17. ISO 9001:2000 Certificate

  18. 2010 Construction Economy • Competition • Tender prices • Explore alternative markets N • R809 billion 3 year budget ?? • Public sector technical capacity • Consulting Engineering Reserve Capacity

  19. CESA OVERVIEW • Small/New firms joining CESA • 78 new since 2009 Ave size = 12 members • Transformation • 2009 - 38% ; 2010 - 42% : 2011 to date - 55% • YPF • SABTACO • Mergers and Acquisitions amongst Firms • Globalisation of SA Firms • Young Professionals Forum

  20. CESA OVERVIEW • Infrastructure Research • Water: Supply & Quality • Prof Grant Cawthorn: “most imminent challenge” • Energy (Cost ?) • Transportation

  21. CESA OVERVIEW • Procurement-Procurement-Procurement-Procurem.. • Procurement Road Show : Successful • 600 Reports from members • Bring back Quality ! ! • CESA acting as CIDB agent : MOU signed

  22. CESA OVERVIEW • Conference on Alternative Delivery Mechanisms • Business Integrity • Talking talking ..... but walking ? • CESA code of conduct • Integrity pact : Commit to good Governance (Busa + CIDB) • Sustainability guidelines • Small Company Workshop

  23. CESA OVERVIEW • School of Consulting Engineering • 124 courses • 2 000+ delegates • Candidate Academy for Mentors & Mentees • Certificate in Consulting Engineering Management • Client Liaison & Access to Decision Makers • Panels of Expert Members • Media Coverage (R5 million) ---

  24. CESA the one stop shop for infrastructure industry matters

  25. 2010 Industry Events/Issues • Soccer World Cup • Engineering Excellence • Legacies & Lessons • Co-operation/Partnerships • Strategic and capital project planning • National Planning Commission • CESA keen to participate

  26. 2010 Industry Events/Issues • The Green Wave • 83% of SA emissions from energy sector • 30 Facilities contribute 95% of all SA emissions • SA carbon intensity > China, India • SA contributes 0,98% globally

  27. 2010 Industry Events/Issues • The Green Wave (cont) • Climate Change Conferences : Cancun (2010), Durban (2011) • Green house gas emissions : (Cop 15) • Carbon credits : 18 CDM (Clean Dev. Mechanisms) Projects • Carbon taxes on vehicles (Right reasons?) • Green Building Council • Green Infrastructure body ?

  28. 2010 Industry Events/Issues • BRIC + S • Population : 3,5 / 6,9 Billion ( 51%) • 40% of World economy • C =2; B=7; I=10; R=11; SA=28th biggest globally • Commodity driven

  29. 2010 Non - events • Construction Industry Charter • Municipal Systems Amendment Bill (in the “Z” file) • Service Delivery • Protests • Unspent budgets: Job losses ..... R12.4 bn • Turn around interventions • Professional Technical Leadership 5 100 1 800

  30. 2010 Non - events • Register of Built Environment Professionals (CIDB) • Identification of Work (ECSA/CBE) • CETA Governance /Value ?

  31. 2011: The Way Forward According to Thomas Malthus “ World is fast heading for a food crisis leading to mass starvation. ” Circa 1750 Oxfam International Report “Who will feed the World?” 5 May 2011

  32. 2011: The Way Forward • Global Trends • West East (G7 E7) • Examples visible • Future alliance partners • Global Competition in SA • Africa • Increased world focus on Africa • Strong growth • Corridor developments

  33. 2011: The Way Forward • South Africa • Acc to Int’l Fin Corp: “Doing business”: 34th /183 • SA Economic Growth Rate below average • Skills • Municipal Elections : delays • Corruption is out of hand

  34. 2011: The Way Forward • New Growth Path • Infrastructure is cornerstone • Jobs during Construction : 7 jobs per R1 million • Jobs to operate and maintain over lifespan • Improves Productivity • Attracts investment : more jobs • Unease about kicking the goals

  35. 2011: The Way Forward • 30 000 engineering graduates 2014 ? • 2010 : 2 500 engineering graduates pa • Enhance Quality of Educators • Private sector will respond 33 28 23 18 13 8 Number of graduates GFCF as a % of GDP Civil Engineering graduations - UCT South Africa’s GFCF as a % of GDP

  36. 2011: The Way Forward Service Delivery Framework : 5 frames • Professionalise Public Service • Deployment • Technical professionals for technical positions • 5 Year Contracts

  37. 2011: The Way Forward 2. Infrastructure planning/programming • 1.Too few South Africans work • 2.The quality of school education for most black people is sub-standard • 3.Poorly located and inadequate infrastructure limits social inclusion and faster economic growth • 4.Spatial challenges continue to marginalise the poor

  38. 2011: The Way Forward • 5.South Africa’s growth path is highly resource-intensive and hence unsustainable • 6.The ailing public health system confronts a massive disease burden • 7.The performance of the public service is uneven • 8.Corruption undermines state legitimacy and service delivery • 9.South Africa remains a divided society

  39. 2011: The Way Forward 3.Innovative Planning by Government

  40. 2011: The Way Forward 4. Appropriate construction procurement models

  41. 2011: The Way Forward 4. Appropriate construction procurement models (cont) • PPP’s • Framework Agreements (CIDB Procurement Note 15 of 2008/10) • Target Cost Contracting • International Experience • S A Experience • Reduce Client Management Resource Needs • Meet social objectives

  42. 2011: The Way Forward 5. Cultivate a mutually trusting relationship between Private and Public Sector

  43. ????????????????????????????????????????????? Can we Succeed? ?????????????????????????????????????????????

  44. ????????????????????????????????????????????? If she can, we can! Bit by Bit ?????????????????????????????????????????????

  45. ‘PARTNERING FOR GROWTH’ THANKS

  46. CONCLUSION • Outlook improving after World Cup Paralyses • Shortage of Technical leadership • CESA Members employ 21 200 experienced infrastructure design and management experts • CESA is keen to partner with its clients to grow South Africa Let’s WORK TOGETHER ‘KOM ONS WERK SAAM’

  47. 33 28 23 18 13 8 Number of graduates GFCF as a % of GDP Number of graduates Civil Engineering graduations - UCT South Africa’s GFCF as a % of GDP

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