OPINION: SA’s construction sector is in ICU. Here’s how government can help

Like most sectors of the economy, the South African construction sector has been struggling prior to the lockdown instituted by government in response to the Covid-19 pandemic. This restriction on almost of all projects further pushed already struggling construction companies down the cliff.

All comes against the backdrop of well-known industry issues such as declining government infrastructure spend poor payment practices within sector’s supply chains and more importantly, the broken industry operating model that is no longer fit for purpose.

This declining trend in public infrastructure spend is largely due to municipalities and state-owned companies substantially reducing their spending over the past few years. Transnet, Eskom and several major state-owned companies have struggled to access capital markets to finance capital projects and infrastructure programmes.

Most municipalities have been consistently underspending on conditional infrastructure grants and are they are not collecting enough revenues to finance their capital budgets. The same trend is visible in infrastructure spending as a percentage of GDP. Government can change this.

For instance, without even lifting a finger, the government can consider practical and actionable strategies already presented and tabled by the industry.

In response to Covid-19, the construction sector has since formed a Construction Sector Covid-19 Task Team, currently comprised of over 30 organisations representing major suppliers, contractors, regulators, professional associations and built environment professional services firms. This Task Team has since worked with government to develop an industry-specific Covid-19 Construction Health & Safety Protocol. Furthermore, the Task Team has submitted a comprehensive short to medium term plan government of actionable reforms to help the sector recover.

This initiative shows that the construction sector is already working together to respond to the impact of the Covid-19 and ensure sustainability of the industry over the coming weeks and months, as well as to enable it to play a full part in South Africa’s economic recovery as the global search for vaccine progresses.

However, the sector also needs support and a clear commitment from government expedite various infrastructure policy reforms.

1. A predictable and reliable long-term infrastructure pipeline

A forward-looking pipeline of planned projects and programmes of economic and social infrastructure is urgently required to help construction companies understand which infrastructure investments government is currently prioritising. By publishing the pipeline, the government will help provide visibility, knowledge and understanding of where infrastructure investment is being made and by whom. Publishing projections of longer-term infrastructure investment will boost market confidence and will help the sector with business planning. This is important because the 18 Strategic Infrastructure Projects (SIPs) which were coordinated by the Presidential Coordinating Infrastructure Commission established during the Zuma administration lacked transparency and to this day no one has a clue about their progress. The recent announcement that the Presidency will host the inaugural Sustainable Infrastructure Development Symposium is a step in the right direction.

2. A single government body to coordinate infrastructure planning

The government should establish under the Department of Public Works and Infrastructure an infrastructure planning and coordinating body that will combine fragmented efforts and infrastructure related work currently done in different government departments. The Budget Facility for Infrastructure within Treasury, the GTAC Capital Projects Unit, the Presidential Infrastructure Coordinating Commission within Trade, Industry and Economic Development, the Public-Private Partnerships Unit within Treasury and ultimately the newly established Presidential Office for Investment and Infrastructure led by Dr.Kgosientsho Ramokgopa should all be merged into a single entity will coordinate all infrastructure planning and coordinating efforts of national, provincial, local government and major state-owned enterprises. This has obvious benefits for the sector. The current level of fragmentation is problematic and wasteful. The lack of transparency by DBSA on the R100bn Infrastructure Fund is also concerning.

3. The use of innovative infrastructure procurement delivery methods

Government should also commit to moving away from the unsustainable transactional and cost-driven procurement of infrastructure and instead embrace the creation of value-driven, collaborative procurement methods that can deliver investment programmes that secure the outcomes demanded by clients and the public. The use of alliance contracting, integrated project delivery and design-build procurement could help address the gaps and failures presented by the current traditional construction procurement delivery approach.

The myth that lowest cost equals best value only survives because of the lack of best value options to compare it with. Furthermore, the processes of designing infrastructure, obtaining tenders, administering contracts and dealing with claims all incur transaction costs, management costs and overheads down the supply chain. These costs are embedded in every price submitted by tenderers and in the final price paid by the owner. The construction industry shows little interest in measuring these costs in a consistent manner and this lack of transparency. Government can change this.

South Africa needs high performing infrastructure. Without it we have little hope of improving the productivity of our economy. Without an improvement in productivity, we will not be able to secure the quality of life demanded by our growing population. Yet the model we use to deliver and operate much of our infrastructure is broken. Too often it produces assets and networks that are expensive, perform poorly and fail to exploit the advances in technology that are transforming other industries. Too often the supply chain that delivers our infrastructure seems locked into a cycle of low margins, low investment and dysfunctional relationships. Covid-19 has presented our government with an opportunity to change this.

By Mr, Ronnie Siphika is the Chief Executive at Construction Management Foundation and member in the Construction Sector Covid-19 Rapid Response Task Team.

Source


To view more Articles, please visit our Leads 2 Business Blog.
If you are interested in becoming one of our subscribers, please visit Leads 2 Business.
To view notes with screenshots on how to use our website, please visit Leads 2 Business Wiki.

About Sasha Anderson

Millennial Mom + wife living the hash-tag life. Reach out if you want to talk: L2B, social media, construction, technology, marriage, parenting, popular culture and travel. Remember: If You Fail - Fail Forward

Featured Tender: Proposal for the Panel of Service Providers (Consulting Engineers and Contractor) for the Planning, Design and Construction of WSIG (Using a turnkey strategy)

Featured Tender: Eastern Cape

Contract Number:

ANDM/IDMSWSA/148/04/05/20 – Alfred Nzo District Municipality

Description:

Alfred Nzo District Municipality (ANDM) is inviting all suitable Qualified and Experienced Professional Service Providers to submit bids for the following projects: Proposal for the Panel of Service Providers (Consulting Engineers and Contractor) for the Planning, Design and Construction of WSIG (Using a turnkey strategy).

Category Industry
Consultants, Infrastructure Water
Region Site Inspection
Eastern Cape NB: There will be no compulsory briefing
Closing Date Contract Period
23 June 2020 at 10:00 No details

 


Please visit Leads 2 Business for more information on this Tender Notice.
If you are interested in becoming one of our subscribers, please visit Leads 2 Business.
For assistance on how to use our website, please visit Leads 2 Business Wiki.
To view more Featured Tenders, please visit our Leads 2 Business Blog.

About Nazeema Sishi

I am a content researcher who just started with Leads 2 Business in February this year, I work in the Daily Tenders South Africa department. I am a young vibrant lady who enjoys meeting new people and doing new things. I welcome challenges and always find new ways of doing things. I am a mum and I love spending time with my not so little, very talkative son.

NHBRC regional offices to resume, satellites phased in

 

While the National Home Builders’ Registration Council (NHBRC) provincial offices will resume full service operations next Monday, 8 June, satellite offices will be phased in gradually.

The satellite offices are in Tzaneen, Witbank, Bethlehem, Thulamela, Mafikeng, Klerksdorp and Newcastle.

Developers, contractors, home builders and housing consumers, who need to interact with the NHBRC, are urged to only visit offices when it is absolutely necessary for the collection of certificates (i.e. registration and enrolment) and to complete technical assessments.

“We further encourage those who need to submit necessary supporting documents to do so from the safety of their homes or offices via our new emailing list,” read the statement.

The new emailing list is:

1. Gauteng: GP-online@nhbrc.org.za

2. Western Cape: WC-online@nhbrc.org.za

3. Eastern Cape: EC-online@nhbrc.org.za

4. Free State: FS-online@nhbrc.org.za

5. North West: NW-online@nhbrc.org.za

6. Limpopo: LP-online@nhbrc.org.za

7. Mpumalanga: MP-online@nhbrc.org.za

8. KwaZulu-Natal: KZN-online@nhbrc.org.za

9. Northern Cape: NC-online@nhbrc.org.za

The NHBRC said each of its offices has established a Covid-19 task team to ensure the continued safety of employees and customers. The council urged all those visiting its offices to cooperate with the measures put in place.

“As an agency of the Department of Human Settlements, we support all the national Covid-19 interventions aimed at providing citizens with dignified accommodation and access to clean water, thus contributing to reducing the risks of infection associated with overcrowding,” said the building council.

Source


If you are interested in becoming one of our subscribers, please visit Leads 2 Business.
To view notes with screenshots on how to use our website, please visit Leads 2 Business Wiki.
To view more Featured Companies, please visit our Leads 2 Business Blog.

About Sasha Anderson

Millennial Mom + wife living the hash-tag life. Reach out if you want to talk: L2B, social media, construction, technology, marriage, parenting, popular culture and travel. Remember: If You Fail - Fail Forward

Featured Company: Afrimat (Pty) Ltd

 

Who’s who in your Industry?

This week we are featuring Afrimat (Pty) Ltd, North Cluster – Gauteng, KZN and Free State. Davin Giles is the Managing Director for Afrimat North Cluster and you can read what he has to say here…

Afrimat

If you are interested in becoming one of our subscribers, please visit Leads 2 Business.
To view notes with screenshots on how to use our website, please visit Leads 2 Business Wiki.
To view more Featured Companies, please visit our Leads 2 Business Blog.

About Shanna Knezovich

I started my journey with Leads 2 Business in 2013 as an Account Co-Ordinator. I transitioned into an External Sales position as an Account Executive in 2015. I help professionals within the building & construction industry keep up to date with the latest project and tender information as well as source new business opportunities throughout Africa.

Featured Project: East London Beachfront Precinct

Eastern Cape

Description
Construction of the proposed new East London Beachfront Precinct, Court Crescent. The scope of work for this project is as follows: Construction of new facilities comprising of an Information Centre and Ablutions, Hawker Stalls, Amphitheatre, Planters, Seating Areas, Water Feature and Drinking Fountains. There is also electrical and mechanical installation, associated site works such as retaining walls, walkways, steps, platforms, water, sewerage, stormwater reticulation and the refurbishment of existing structures. Estimated Contract Value: R87 000 000.00. -33.0132059, 27.920364999999947

 

Status Region
Underway East London
Category Value
Building R61 Million – R100 Million
Industry Timing
Hospitality & Leisure January 2020 – June 2021 (18 Months)
Sector Class
Public Open Tender

 


If you are a valued Projects subscriber, you can find more details about this Featured Project here
If you are interested in becoming one of our subscribers, please visit our website.
To view notes with screenshots on how to use our website, please visit our Wiki site.
To view more articles, please visit our blog.

About Sasha Anderson

Millennial Mom + wife living the hash-tag life. Reach out if you want to talk: L2B, social media, construction, technology, marriage, parenting, popular culture and travel. Remember: If You Fail - Fail Forward

Activation plans for the Construction Industry post COVID-19

At the end of April, the Construction COVID-19 Rapid Response Task Team (CC19RRTT) submitted proposal medium-term plans for the development and construction industry post-COVID-19.

Below is a synopsis of the proposal. The full proposal document is available below.

Short-term interventions include re-activation of construction sites and processes with a focus on health and safety measures to assist the safeguarding of construction workers and suppliers.

Medium and longer-term interventions are required to support the built environment and construction sectors to ensure contributions to economic recovery and growth.

The Public Infrastructure builds, together with private sector investment, plays a key role in creating employment opportunities in the sector and its regulation determines the successes or failures of the Built Environment sector.

The property development sector, both private and public, is responsible for fixed capital investment that addresses both social and market needs and, importantly, reflects medium-to-long term confidence in the future of the country.

Government contributes towards public infrastructure builds and regulates the sector through various entities, guidelines and provisions which play a key role in creating employment opportunities in the sector.

The Covid-19 situation happened at a time when the entire building industry was in a crisis, bringing focus and urgency to the need to review some of the regulatory framework and procurement environment for which Government is responsible.

More than two-thirds of any development process is currently being spent on obtaining statutory approvals, twice as long, if not longer than it takes to construct a typical development. Construction can only commence once statutory approvals are in place. If one were to support the construction industry, one cannot but address duplication of statutory processes and delays in the statutory approval phase of a project. Such delays also inhibit any national economic turnaround.

The submission is structured along with the following main themes:

  1. The need for the alignment and merging of all statutory approval processes into a single application process.

  2. The empowerment of qualified and registered design professionals to self-certify their work, or alternatively peer certification on a rotational basis.

  3. Restructuring of public procurement processes under the guidance of the quantity surveying, architectural and engineering professions who are responsible for procurement processes in the private sector daily noting the need to acknowledge the broad intent of the current PFMA & MFMA’s. The shortcomings of these policies in the procurement of professional services also should be acknowledged and reviewed.

  4. Establishing a supply chain environment which differentiates between the procurement of goods and procurement of professional services.

  5. Creating a regulatory framework which supports the industry to be sustainable rather than contribute to its collapse.

  6. Increase public-private partnerships for the provision of infrastructure projects.

  7. Facilitation of development finance to ensure that more projects get to the bankable feasibility stage.

The medium-term plan calls for a fundamental change in government and public engagement in order for more construction projects can take place, thereby delivering all the benefits that the construction industry can achieve as an economic multiplier in terms of creating employment ultimately resulting in the recovery and the future of the country.

The construction industry is paramount in achieving any future economic growth and the proposed plan will most certainly assist in its activation post-COVID-19.

The Full Proposal Document

cc19rrtt_medium_term_proposa

Source: ASAQS


To view more Articles, please visit our Leads 2 Business Blog.
If you are interested in becoming one of our subscribers, please visit Leads 2 Business.
To view notes with screenshots on how to use our website, please visit Leads 2 Business Wiki.

About Sasha Anderson

Millennial Mom + wife living the hash-tag life. Reach out if you want to talk: L2B, social media, construction, technology, marriage, parenting, popular culture and travel. Remember: If You Fail - Fail Forward

Leads 2 Business Weekly Quote

posted in: General 0

The Significance of Sustainability: “What’s the use of a fine house if you haven’t got a tolerable planet to put it on?” Henry Thoreau


If you are interested in becoming one of our subscribers, please visit Leads 2 Business.
To view notes with screenshots on how to use our website, please visit Leads 2 Business Wiki.
To view more Articles, please visit our Leads 2 Business Blog.

About Sasha Anderson

Millennial Mom + wife living the hash-tag life. Reach out if you want to talk: L2B, social media, construction, technology, marriage, parenting, popular culture and travel. Remember: If You Fail - Fail Forward

Featured Tender: Consultancy Services for Undertaking Feasibility Study, Detailed Engineering Design, Environmental and Social Impact Assessment and Preparation of Tender Documents for Upgrading of Nangurukuru – Liwale Road Section (230 Km) to Bitumen Standard

Featured Tender: Tanzania

Contract Number:

AE/001/2019-20/HQ/C/55 – Tanzania National Roads Agency

Description:

This invitation for expression of interest follows the General Procurement Notice (GPN) which appeared in Daily News Issue no. N/A dated 26/09/2019. The Government of the United Republic of Tanzania has set aside funds for the operation of the Tanzania National Roads Agency – HQ during the financial year 2019/20. It is intended that part of the proceeds of the fund will be used to cover eligible payment under the contract for the Consultancy Services for Undertaking Feasibility Study, Detailed Engineering Design, Environmental and Social Impact Assessment and Preparation of Tender Documents for Upgrading of Nangurukuru – Liwale Road Section (230 Km) to Bitumen Standard. The Tanzania National Roads Agency – HQ now invites eligible Firms to indicate their interest in providing the services which include Consultancy Services for Undertaking Feasibility Study, Detailed Engineering Design, Environmental and Social Impact Assessment and Preparation of Tender Documents for Upgrading of Nangurukuru – Liwale Road Section (230 Km) to Bitumen Standard

Category Industry
Consultants Institutional
Region Site Inspection
Tanzania No Details
Closing Date Contract Period
22 June 2020 at 10:00 (Local Time) No details

 


Please visit Leads 2 Business for more information on this Tender Notice.
If you are interested in becoming one of our subscribers, please visit Leads 2 Business.
For assistance on how to use our website, please visit Leads 2 Business Wiki.
To view more Featured Tenders, please visit our Leads 2 Business Blog.

Infographic: Vendor vs Open Quotes

Use our latest infographic covering Vendors and Open Quotes to decide which is best for you.

Open Quotes vs Vendor

To view more Infographics, please visit our Leads 2 Business Blog.
If you are interested in becoming one of our subscribers, please visit Leads 2 Business.
To view notes with screenshots on how to use our website, please visit Leads 2 Business Wiki.

About Marlaine Andersen

Leads 2 Business Advertising Co-ordinator and Digital Designer

Abandoned Construction Projects in Africa

posted in: Construction Chat 0

An abandoned construction project can be defined as a project which has been 1) totally abandoned, or 2) indefinitely delayed. Abandonment may happen at any stage of a project life-cycle and incur a significant amount of loss.

There are various reasons why construction projects are abandoned:

  • Inadequate planning
  • Inadequate finance
  • Inflation
  • Bankruptcy of Contractor
  • Variation of project scope
  • Political factor
  • Delaying in payment
  • Incompetent project manager
  • Wrong estimate
  • Faulty design
  • Inadequate cost control
  • Change of priority
  • Unqualified/inexperience Consultants
  • Administrative/legal action
  • Disputes
  • Natural Disasters

The effects of construction projects are mainly:

  • Unemployment
  • Bad image for government
  • Government sector underdevelopment
  • Slow economic growth
  • Financial institutions lose confidence in the state
  • Discourages investment
  • Loss of revenue by state

Here are a few construction projects that have been abandoned and the reasons:

1. The Ghana-STX Building Project, a $10 billion housing project – The project was supposed to lead to the construction of 200,000 houses in Ghana for over 5 years. From research findings, causes of failure of the project were due mostly to disunity, lack of effective governance and project control. Corruption was also a feature.

2.  Mususu Kalenga Building in Zambia – The structure was built at a cost of K400 million by the Zambia State Insurance Corporation and sold to Royal Lutanda Company Limited at K800 million in 2000. The 11-storey building has remained abandoned for over 25 years. There is no indication as to why it was never completed.


3.    900-1000MW Coal Power Plant at Lamu in Lamu County, Kenya – Kenya’s National Environment Tribunal revoked the license granted to the Power Company to build a coal power plant, due to the companies failure to do a thorough environment and social impact assessment (ESIA) that met the requirements of the law.

4.    Construction of a 20,000 seat capacity stadium in Mongu District in Zambia – The government abandoned its plans for the Mongu Stadium most likely due to lack of funding.

5.    Grand Police Bay Hotel, Seychelles – There was a lot of backlash regarding this project and the government decided to not proceed with its plans.

6.    Al-Noor Tower, Casablanca, Morocco – The 540m high skyscraper was to include a luxury hotel,  offices, apartments, an art gallery and a luxury arcade of shops. The client, Middle East Development LLC decided to not proceed with the development stating that a tower if this size was not an appropriate project for Morocco at the moment.

7.    Hope City – A mixed-use development in Ghana – With a downturn in the economy, relocation of the project, and erratic power supply, work on the project never got underway. RLG Communications, the Ghanaian tech company which was supposed to be spearheading the project was itself caught up in various scandals. To date, nothing further has happened with this development.

8.    Pinewood Uranium Project, Tanzania – Kibo Mining (AIM: KIBO; AltX: KBO) announced on 24th February 2017 that it will cease activities at its Pinewood and Morogoro uranium coal and gold projects with immediate effect. The reason behind this strategic choice is in that both Metal Tiger and Kibo Mining have experienced considerable success in other projects of their business portfolio and this has led to these interests becoming the absolute focus of each company.

9.    Construction of sewers, roads and infrastructural services for 360 plots in Kazungula Village and at Nnyungwe area in Kasane, Botswana – Government mysteriously abandons the P80 Million tender as works near completion and this sparks corruption rumours.

Sources:
Research Gate – Abandoned
Research Gate – Government
PM World Library
The Gazette
L2B


To view more Articles, please visit our Leads 2 Business Blog.
If you are interested in becoming one of our subscribers, please visit Leads 2 Business.
To view notes with screenshots on how to use our website, please visit Leads 2 Business Wiki.

About Nadia Milln

My journey at Leads 2 Business all started back in September 2014 as a content researcher in the Daily Tenders Africa Department. In March 2018 I was promoted to content researcher in the Private Project department. I am a fun loving, bubbly person and mom to a beautiful baby boy who is the absolute light of my life.

1 64 65 66 67 68 69 70 132