The global best practices to mimic to ensure SA infrastructure drive delivers results 

By Simon Norton – International Zinc Association, Africa Desk 

If South Africa is to have any hope of economic recovery, no sector of the economy can afford to do things the way it did before 2020 or as was done in the past.

That’s as true for the civil engineering and construction industry as it is for any other sector. Not going “back to the way things were” doesn’t just mean relooking at supply chains, staffing and winning new contracts. It means thinking with sustainability and longevity in mind, prioritising long-term gains over short-term profit and understanding that focusing on high standards and excellence in the present will reap large future dividends.

Easier said than done, which is why it is useful to look further afield to learn from our global neighbours on what works, how it works and how to change course if it doesn’t work.

Global best practice: Long-term thinking 

Much of our collective time, energy and resources is spent on “patching” our infrastructure, rather than addressing the root cause of the problem which would be mainly the use of cheap materials, substandard contractors and the government tender system.

Public infrastructure serves as a focused example of how long-term thinking could save money, create jobs and deliver a better outcome overall in South Africa. If we were to vigorously promote and require in government tenders that, where appropriate, all steel used for infrastructure projects be galvanised, then we’re thinking long term. Galvanised steel structures can give a lifespan of over 50 years in the right environment and offer exceptional performance at the coast. Hot dip galvanising is only marginally more costly at the outset, but the savings in terms of long-term maintenance-free service are exceptional.

If we can get to a point where our public infrastructure lasts longer than at present and requires far less maintenance, the focus can shift to new build projects that will improve the general state of the economy and, by extension, the welfare of South Africans.

Global best practice: Prioritise local 

Over two million jobs were lost in the second quarter of this year in SA and the economy, already struggling prior to the crisis, is now under severe strain. Critically, unemployment is expected to reach an all-time high of 40% in coming months as entire industries face collapse. The country needs a New Deal to get people back to work and to boost GDP rapidly. A local-first approach will be instrumental in achieving this together with a boosted manufacturing drive.

To stimulate a virtuous cycle of capital formation, market stimulation, and job creation, we could turn to our non-ferrous metal mineral wealth but not in its raw unprocessed form. We must increase its value by processing our non-ferrous metal ores into refined material and harvest the rare and highly valued metal by-products that go with it such as gold, silver and germanium.

The construction of a new South African zinc refinery, as just one example, will reduce dependence on SHG zinc imports; will give a much needed boost to the construction, steel and manufacturing industries by offering local supply; boost the secondary zinc industries such as recycling, fertilizer, die casting and tyre making; and create much-needed jobs in both the short and the long term.

Building such a facility will only make it easier to buy local and save on foreign exchange, it will also speed up time of delivery to galvanisers inside SA. Again, this benefits everyone. If South Africans buy local, manufacturers will have more capacity to hire skilled staff. And, where those skills don’t exist, there will be a driver to offer training, resulting in more people in higher-paying jobs. This adds value across the chain and doesn’t just include economic benefits but will also go a long way to creating a more socially cohesive, united country.

Global best practice: Circular solutions

The United Nations projects that the world population will grow to a staggering 8.5 billion people in the next decade. Supporting a global citizenry of this size will necessitate economic development and the expansion of the global economy at an unprecedented scale.

Meeting these needs will place enormous strain on our finite natural resources, which is why thinking in “circles” when it comes to the use of metals and minerals is crucial.

Optimisation in mining, production, product life cycles and recycling need to be a foremost priority. Currently, one of the biggest barriers to greater sustainability is the linear economic model of “take-make-dispose”. It’s key to rethink this model to keep waste out of the system.

One resource that adheres to the “virtuous circle” approach is the versatile and abundantly available zinc. An essential element for all living things and presenting useful metallurgical and chemical properties, zinc features in our daily lives with applications in everything from agriculture and building to wellness and hot-dip galvanising of iron and steel structures.

Zinc can be recycled without losing or compromising any of its metallurgical properties or overall value, meaning it can be used over and over again. Zinc is not only a sustainable option during use, but the recycling thereof also works to reduce concentrate demand, energy use, emissions and reducing waste disposal.

In line with global best practices, South Africa’s infrastructure development efforts needs to take its cue from zinc to find more materials and resources with this “circular” ability.

Global best practice: Shift road freight to rail 

Transnet’s road-to-rail strategy has been on the public enterprise agenda for some 20 years now and has the potential to accelerate SA’s economic recovery, which is why it’s crucial that it should be implemented and acted upon now with no further delay. Furthermore, a project to widen the rail gauge on South African rail links would allow high speed intercity travel and fast goods movement.

The shifting of freight from road to rail has many benefits. Rail transport systems are six times more energy efficient than road, and four times more economical, which further drives the case for a safe, reliable cargo rail system as being fundamental to a country’s economic growth. Shifting from road to rail will obviate the need to spend so much on roads and road repair.

Equally significant, particularly considering the global drive for a sustainable future, is that rail is amongst the most climate-smart transport options. The upgrade and expansion of our rail networks and infrastructure also has the potential to create employment opportunities on a large scale and is now more urgent than ever.

Best practices that offer both an environmental and economic benefit need to be top priority in a country like South Africa which needs to feed its people and offer them a good working life. It is hard to argue against solutions that can guarantee long-term savings because savings mean more available spend on other, much-needed infrastructure projects.

 

 

 

Building a post-pandemic construction sector 

By Cyril Vuyani Gamede 

It is widely accepted that, the best way for the government to stimulate the economy, thus ensuring its quick recovery, is by developing and executing an infrastructure-led economic recovery plan. Job creation in the construction sector will be a vital indicator to measure the success of South Africa’s economic recovery plan.  

This was true prior to the outbreak of the Covid-19 pandemic but will even grow in importance as local economic activities emerge from the embers of the global meltdown. Thus, initiatives designed to support the growth, and survival, of emerging contractors, should attract greater public attention and draw the support from established companies.  

It is, indeed, possible to achieve the objectives of job creation, empowerment, and skills transfers through far-sighted partnerships between the public and private sectors and a collective commitment to transform the construction industry. 

A working partnership is already up and running and achieving results. Last year the Construction Industry Development Board – cidb – signed an agreement with the Jobs Fund and the leading black-owned infrastructure company, Concor, to support SMEs and individuals who seek to gain a foothold in the sector. 

The aim of the tripartite initiative by the cidb, the Jobs Fund and Concor  is to develop 195 small and medium enterprises, create 1 950 new, permanent jobs and train 2 050 beneficiaries over a three-year period. Jobs are to be created across the spectrum of construction activities – in plumbing, in building, in engineering, quantity surveying and project management. 

 Concor Construction, part of the Southern Palace Group, acts as the implementing agent to identify emerging enterprises who are well-placed to benefit from the initiative, to assist with training and mentoring and to monitor their progress. 

 It was quite clear from the outset that the biggest impediments to the growth of aspiring small ventures are access to capital and market opportunities as well as a lack of technical skills. Thus, the initiative focused on technical skills which will lead to improvements in the cidb gradings of participants and this will, in turn, enable them to participate in larger projects in the future. The aim is to mature small businesses into well-established companies that could operate and thrive in the mainstream economy. 

The participants in the initial stage of the partnership are primarily from Limpopo, Mpumalanga, the Eastern Cape and Gauteng with some experience in civil contracting for the building of schools, residential and commercial developments. The project includes a thorough analysis of their business skills to identify areas of strength, but also the needs for organisational reconfiguration, empowerment, and the skills development of employees. 

 Most of the initial targets have already been exceeded with Concor reporting that it accepted nine SMEs in the first six months of the programme and was on track to exceed the objective to create 40 jobs and train a further 40 beneficiaries. 

This is a three-year programme which will gather momentum as it reaches maturity and garners the support from the broader industry. Covid-19 may slow down this momentum over the short term but the national focus on infrastructure and construction as the driver of the post-pandemic recovery will ensure this initiative will survive and thrive. 

 The cidb is a natural participant in this project because of its pivotal role in the construction industry and its proven track record of supporting emerging businesses through regulation and access to opportunities. 

 We have also, through the years, built strong relationships with established players in the construction and engineering sectors and have long been involved in initiatives to link large-tier companies with black-owned enterprises, especially those led by women and the youth. 

 There is a growing recognition of the importance to sustain the growth of SMEs and develop them into sustainable businesses. They are the productive drivers of inclusive economic growth and they will continue to take root in unsaturated sectors of the economy. 

 Moreover, they play a vital role in technical innovation and the utilisation of local resources. This can be a potential gamechanger to determine the post-Covid-19 trajectory of the South African economy. 

 It will lead to increased participation of emerging companies in the 62 vital infrastructure projects that have already been identified and are expected to attract more than R360bn in investment. These projects are designed to unlock infrastructure investment in areas in which the cidb and its partners have considerable expertise such as transport, water and sanitation and human settlements. 

The cidb will continue to support this as a priority initiative. This will, no doubt, be a valuable contribution to our strategic objectives to grow skills in the industry, improve access to opportunities and create partnerships that will contribute to the transformation of the construction sector. 

 Gamede is the CEO of the Construction Industry Development Board. 

 

Stagnant Websites Are Weapons Of Self-Destruction

It is time the construction industry realised that proper marketing holds the key to growth and survival – particularly in the current economic climate, says Jan de Beer, professional writer and publicity consultant.

De Beer has extensive experience in journalism and has consulted on media matters to dozens of construction and engineering companies and associations in a long career, including MBA, The Concrete Institute, Castrol, SA Paint Manufacturing Association, KBAC Flooring, Gauteng Piling, Chryso SA, and Concrete Society of Southern Africa.

He says digital marketing has become a vital tool for companies, particularly as there are now few print journals in circulation. “Websites are vital to promote a company’s work and acquire more clients. An impressive, up-to-date website reassures prospective clients that a company is doing well and busy – but what does a website with a last posting of company news done, say, in 2012, tell you? It rings alarms bells indicating, for example, that the company lacks professionalism, has not had news to be proud of for years, and may well be on its last legs.”

He adds: “A website allowed to languish becomes a weapon of destruction. How are visitors to a website to know that ancient facts about the company are still relevant? If a website is not cared for, it is far better to simply remove it to prevent it driving potential business away.”

That “News” section – with news (blogs) professionally written and illustrated – on a company’s website is a powerful and affordable and yet often totally neglected aspect of marketing. Blogs should be updated once or least twice a month by a competent writer ideally working in liaison with a website administrator who can keep tabs on the performance and readership of a company’s website. “Companies simply have to ensure that their latest news get posted regularly – irrespective who handles the task: the receptionist, PA, or a professional web administrator.”

De Beer says Google also focuses on quality of the content on a website. Higher scoring is attributed to good copy and relevant titles, for example, and a regularly updated site will be ranked more prominently to assist the site owner achieve a spike in traffic.

News to post on the company website could range from a new product, new staff member, projects landed, or simply authoritative, informative copy along generic lines on the type of product offered by the company. “If you are selling a quality range of paint brush, for example, tell your website visitor what to look for in any paint brush. Subtle marketing can achieve remarkable results.

“Owners of websites who fear that they may struggle to find time to provide content for news blogs, should realise that an experienced writer could make their task much easier. He or she could simply work via emailed mini-questionnaires regarding the facts of a selected project or product, a relevant brochure to draw information from, or personal research,” De Beer adds.

www.jandebeer.co.za

 

GUIDELINE: ANNUAL SHUTDOWN FOR THE CONSTRUCTION SECTOR

The Construction Covid-19 Rapid Response Task Team recommends that the annual builders’ shutdown be from Thursday 24 December 2020 to Monday 04 January 2021.

This means that 24 December 2020 shall be the last working day and Tuesday 05 January 2021 shall be the first working day in the new year. The recommended dates are an industry guideline and should be negotiated with employees based on each employer’s operational requirements.

“Our sector has been hard hit by the outbreak of COVID-19 and the subsequent industry lockdown which caused project delays, loss of contracts and retrenchments to mention a few. Being an economic growth enabler, it is incumbent upon us as an industry to do all we can to close gaps created by the situation. That is why we recommend that the annual industry shutdown be limited to few days than in the previous years” said the Task Team Chairman Mr John Matthews.

The Construction COVID-19 Rapid Response Task Team (“CC19RRTT”) is an industry grouping that was convened to charter a recovery plan for the construction sector. It incorporates the entire construction value chain covering suppliers, manufacturers, property developers, built environment professionals and contractors (main contractors and subcontractors).

 

Could this be the “secret” to the successful rollout of the President’s infrastructure ERRP?

By Simon Norton, International Zinc Association Africa Desk

The rollout of infrastructure, along with energy, is a key part of President Cyril Ramaphosa’s Economic Reconstruction and Recovery Plan (ERRP). This infrastructure drive has mostly been met with skepticism, thanks to a government track record marred by corruption, bribery and sub-standard work that pays little heed to long-term sustainability.

If Eskom, as one example, has taught us anything, it’s that investing in infrastructure is one thing — maintaining it is another. Many agree the government’s approach is positive, but  taxpayer rands will be wasted if the projects aren’t designed to last and end up falling apart a few years down the line.

As the country seeks to redress the economic dislocation of 2020, going back to old ways of doing simply won’t cut it. Across sectors, but particularly in construction and civil engineering, we need to prioritise long-term performance over short-term profiteering.

One of the ways to achieve this is to ensure that we do not skimp on corrosion protection, which is done with hot dip galvanising using zinc. In fact, the viability and longevity of infrastructure projects could be vastly improved by something as simple as relooking the way new build projects are specified.

That’s as true for heavy industry as it is for any other sector. In this instance, sustainability and longevity mean taking a view which prioritises long-term gains over short-term profiteering and understands that focusing on quality and performance in the present will have future dividends.

If the construction industry and civil engineering sector are to embrace such an approach, then they cannot afford to skimp on corrosion protection.

Why galvanizing is essential 

It’s a known reality that significant time, energy and resources are spent on “patching” our infrastructure, rather than addressing the root cause of the problem — which is usually the use of cheap materials, substandard contractors and a faulty tender system.

Public infrastructure serves as a focused example of how long-term thinking could save money, create jobs and deliver a better outcome overall in South Africa. For example, if we were to vigorously promote and require in government tenders that, where appropriate, all steel used for infrastructure projects be galvanized, then we’re thinking long-term. Galvanized steel structures can have a lifespan of over 50 years in the right environment and offer exceptional performance at the coast. Hot dip galvanizing is only marginally more costly at the outset, but the savings in terms of long-term maintenance-free service are exceptional.
If we can get to a point where our public infrastructure lasts longer than at present and requires far less maintenance, the focus can shift to new build projects that will improve the general state of the economy and, by extension, the welfare of South Africans.

Hot dip galvanizing of steel structures and steel items such as concrete reinforcing steel is a cost-effective way to prevent premature corrosion of steel and to ensure a long life for steel in corrosive environments.

And South Africa is not short of those. The country has a coastline of over 2850 kilometres and an extensive, complex and vastly expensive infrastructure has developed along the coast over the past 100 years. Not to mention the vast steel infrastructure underground in the corrosive atmosphere of deep gold mines as well as coal and platinum mines — all of which need the corrosion protection provided by zinc galvanising.

Much of South Africa’s existing infrastructure is located in highly corrosive conditions, meaning that any steel is highly vulnerable to corrosion. So any steel structures can quickly become corroded, unsafe, and may have to be replaced in the short-term after only two to three years of life.

Short-term costs for long-term gains

With infrastructure lasting longer and requiring less maintenance, the State will be able to focus on new build programmes and other developmental issues, increasing the general welfare and wellbeing of all South Africans.

The private sector meanwhile can plough money saved on maintenance into expansion, potentially growing the employment pool. And with the economic destruction wrought by South Africa’s anti-Covid-19 lockdown having cost thousands of jobs, anything that brings new jobs should be welcomed.

Already geared for this 

Fortunately, South Africa is well positioned to take a local-first approach to galvanizing. The country has several zinc mines, with the recently opened Vedanta Gamsberg Mine in the Northern Cape among the most notable, while in 2021 the new Orion zinc mine near Prieska will start operations.

There are a number of South African companies who specialise in hot dip galvanizing for a variety of purposes, ranging from structural steel to fencing, while continuous sheet galvanizers focus on roof sheeting and cladding for construction.

If South Africa is to have any hope of economic recovery post-Covid-19, no sector of the economy can afford to do things the way they did before. While it may seem like a small thing, if South Africa is to deliver the new economy President Cyril Ramaphosa has promised, every potential piece of the puzzle has to be in place. And for the steel industry and civil engineering, that means not skimping on galvanizing.

Property Sector Charter Council and Property Point COLLABORATE to speed up transformation in industry

The Property Sector Charter Council (PSCC) has formed a partnership with award winning business accelerator Property Point (PP) to develop and fast track the participation of black entrepreneurs in the Property Sector.

This is a critical step in consolidating SMME support, ensuring that a design-centred approach is demand-led and results in tangible impact, while bringing small, micro and medium (SMME) businesses into the value chain.

The partnership is given relevance through the transformation framework as envisaged in the Property Sector Code, and will enable PSCC and Property Point to drive transformation in the sector through the incubation and acceleration of black property [focus on women and youth] businesses. It creates a platform that accelerates transformation beyond compliance.

In the initial phase of partnership, 50 black property businesses will be placed in the two-year programme, with the prospect of further impact through the creation of jobs, and downstream services. The PSCC represents 25 industry organisations and associations that are members and are signatories to the Property Sector Code. In addition to the 50 businesses to be identified for the first phase, the partnership also provides for PSCC member organisations to partner up with Property Point for implementation of their enterprise and supplier development needs. Current funding partner of Property Point are Growthpoint, Attacq, Fortress REIT, Pareto Holdings, Public Investment Corporation and SEDA.

With additional partners more support will be available leading to a dramatic increase in the number of black businesses operating in the sector. The increase in sustainable black businesses would have a cascading effect on economic growth, as well in the households and communities.

The property sector has taken a serious knock due to the Covid-19 pandemic and requires a step-change and a brave set of strategies to ensure business sustainability and growth. The pandemic offers an opportunity to adopt the lessons of lockdown – The POWER OF COLLABORATION, beyond competition – the advantages being shared risk, reduced costs and  additional resources which inevitably lead to greater impact to the benefit of all.

According to the PSCC’s report on Transformation presented in 2019, there is still a lot to be done to achieve substantial change in racial and gender composition of ownership, control and management.

Portia Tau-Sekati CEO of the PSCC said South Africa needed an ecosystem of support for businesses in the Property Sector. “We need to go beyond box ticking and compliance to affect purposeful and impact based transformation. We understand that times are tough in the sector and will remain so for the foreseeable future, however now is the time for resetting our thinking and focus on how we build our economy and stimulate the Property Sector through supporting entrepreneurs and proving market access – leveraging on the POWER OF COLLABORATION.”

Shawn Theunissen, Property Point’s founder said “This milestone is significant to us as it moves our organisation to the next phase of  harnessing the  Power of Collaboration with partners who are equally matched and can drive more inclusive growth and participation in the sector as well as the broader economy. In recent past, the industry had focused on businesses outside the property value-chain which was a problem in that the large technical aspects and contracts still went to relatively untransformed businesses, therefore as Property Point we believe in the value of doing Enterprise and Supplier Development (ESD) in the correct way, by creating a solid pipeline of transformed businesses across the full spectrum of the value-chain. This is what we consider transformation beyond compliance.”

He adds, “The 2020 data from the B-BBEE Commission released just a few months ago, in their generic form, are clear that we are seeing low to stagnating levels of black empowerment across industries. Together with our new partners, we aim to debunk this trend and apply the tried and tested methodologies which have previously resulted in 270 black businesses becoming sustainable and profitable over the past 12 years. We aim to work together as an industry to create a solution that will lead us to the desired transformation results under ESD.

“As the property sector we must develop solutions that will solve the challenges that face SA on its path to an inclusive economy. Whatever solution we choose, one thing is clear – corporate, industry bodies and entrepreneurs need to see each other as partners in building SA. The industry needs to be part of the solution that brings entrepreneurs into the mainstream of the economy,”  Tau-Sekati concludes.

2020 PG Bison 1.618 Education Initiative winner announced

On 11 November 2020, students, lecturers, industry professionals and the extended PG Bison family came together across the country for the first-ever digital awards gala ceremony for the 1.618 Education Initiative. After introducing the audience to all the top ten finalists, the big moment finally arrived, and the 2020 winner was announced as Armand Barnard, interior design student at Design Time School of Interior Design in Cape Town.

Barnard wins a cash prize of R50 000, as does his lecturer, Anel Joubert, who is thrilled, given that all three of the top finishers are from Design Time School of Interior Design. Sarah Jane Sperryn scooped second place, winning R25 000, and Dillon Titus took third place, and R10 000. The remaining seven finalists each received a cash prize of R2 000.

Now in its 28th year, the PG Bison 1.618 Education Initiative is aimed at third-year architecture and interior design students, with the objectives of nurturing and recognising young talent, introducing students to real-world briefs and products, and encouraging creative thinking.

“Firstly, I am so honoured to have been chosen as a finalist and winning first prize is nothing short of sensational,” says Barnard, who plans to use his prize money to help pay off his study loan. “This really creates opportunities within the design/architectural world in terms of clout regarding one’s portfolio and CV when entering the working world.”

The 2020 brief asked students to transform a site in a community-based space for work and leisure in South End, Port Elizabeth. They were required to pick a brand or tenant for an empty space in the existing development, that would fit into the current tenant mix, as well as a social cause to partner with their chosen brand or tenant.

Barnard’s winning design submission is titled The Cochlear and is named for the hollow, spiral-shaped bone found in the inner ear responsible for auditory transaction. The young interior designer created a cochlear-shaped building with a focus on hearing and sound. “Hard surfaces and hollow arched hallways help bounce around waves of sound throughout this space in order to create an auditory experience,” he explains.

Barnard has previously worked as a practice administrator at a speech therapy practice and an audiology practice, as a practice manager for a wellness centre, and as an au pair for two special needs children. His healthcare experience has clearly influenced his competition submission. For his social cause, he selected Hearing Health Foundation, a non-profit organisation that works to prevent and cure hearing loss through ground-breaking research, and to promote hearing health.

The Cochlear includes wheelchair access and hearing testing stations and proposes a partnership with celebrated audio equipment brand, Bose, which Barnard believes would “create a platform for hearing awareness and the joys of music”. The Bose-branded space would include product displays, a headphone customisation bar, headphone testing stations and virtual reality stations, among other elements.

“The hardest part of the brief for me was focusing on the concept and remembering to celebrate this thread. Another challenge was meeting the brief’s requirements whilst remembering to add some of my own quirk,” he says.

The institution where he is studying, Design Time School of Interior Design, is no stranger to success at the PG Bison 1.618 Education Initiative. The school produced last year’s runner-up entry, by Anabella Gonçalves, as well as four of the top ten entries for 2020.

The full-time courses offered by Design Time are structured with the view to preparing students for careers in the professional world of building and interior design, and at the same time equipping them with the skills and the knowledge enabling them to explore other design disciplines, such as furniture design, set design, textile design, product design.

Anel Joubert, the winning lecturer, says Design Time is enormously proud of its students’ performance in the competition this year, especially since their projects were completed while working entirely remotely. “Our students all really enjoyed this year’s brief and found it exciting to pick a brand and design an experience for it – the perfect brief for any creative student,” she enthuses. “Thank you, PG Bison. It could not have been easy to navigate the competition this year. We are grateful to be part of this prestigious competition.”

Betterect’s Vamosem semi-mobile crusher plant: ‘steeling the show’ at Steel Awards 2020

Betterect, a South African specialist in the fabrication and erection of large steel structures within the mining, petrochemical and other industries, both locally and internationally, recently won the Industry category of the prestigious annual Steel Awards 2020.

Held each year in recognition of excellence within the built environment, the Steel Awards serves as a platform to showcase originality, technical expertise, innovation, design and jaw-dropping steel structures. The competition is fierce, with nominations from every corner of the country vying for peer recognition within the industry.

Aside from comprising over 1000 fabricated component parts, Betterect’s winning entry – the Vamosem Semi-Mobile Crushing Plant (SMCP) – was a truly big project on many levels, including volume, weight and intensity of labour required.

“The SMCP was commissioned for use on a coal mine in Mozambique,” explains Nicolette Skjoldhammer, Managing Director of Betterect , advising that in July 2019, the mining business unit of German company, thyssenkrupp, commissioned Betterect to undertake the fabrication and pre-assembly of the SMCP as part of the mine’s goal to increase production.

The project was completed on time and within budget, with fabrication completed in February 2020, in time to be entered for this year’s Steel Awards.

“The plant is ‘semi-mobile’ and modular in design, as it has to be relocated as the coal pit grows, with relocation of the plant taking place every two years. Furthermore, it had to be semi-mobile, moved on specialised crawlers, as it is too massive to be transported in any other way,” Skjoldhammer adds.

She explains that steelwork and platework was chosen as the construction material of choice to cope with the immense operational loads that the plant would have to endure during the mine’s operations.

“To ensure that all the modular parts fitted together accurately, we undertook some trial assembly in our workshop. All the critical, ‘mating’ interfaces were assembled to ensure there would be no misalignment on site. The steel work equated to an astounding 950 tons overall, with some 750 tons of structural steel and platework, of which VRN (hard-wearing steel plate) linings accounted for approximately 60 tons. The SMCP needed to withstand a very demanding working environment, entailing robust and reliable manufacturing, and fabricated under the strictest quality assurance and project management procedures, in accordance with Betterect’s and our client’s stringent standards,” she adds and notes: “That it met and exceeded these criteria made it a perfect nomination for the Steel Awards 2020.”

“This is a remote site in Mozambique. Construction is difficult, transport is difficult and the structure itself is technically challenging. So, this was a very well-executed project, under challenging and technically challenging circumstances, and was well-solved,” comments Steel Awards 2020 Judge, Kevin Harris, Managing Director of Fabsmart.

As the client required pre-assembly and full fabrication in one off-site location, the entire structure was fabricated in Betterect’s workshop in Chamdor, Krugersdorp, thereby also reducing the safety risks related to so-called ‘hot’ on-site work.

“While the impressive dimensions made it a contender as an entry into the Steel Awards 2020, there were numerous additional criteria for the selection of this project,” says Francois Herbst, Project Engineer, Betterect.

 

“The latest pulse arc welding technology (full penetration welding) was used for the fabrication of the structure, and the integrity of every weld was tested using either radiographic or ultrasonic non-destructive testing (NDT). This testing process was hugely labour-intensive, but vital to ensure that each weld would endure the arduous and demanding environment in which the SMCP would be deployed,” he explains.

 

Herbst adds: “While the hopper base frame alone weighed close to 45 tons and required heavy lifting and abnormal load transport to site, other than the immense size of the modular components, there were many technical fabrication requirements which made this a worthy project for entry into the Steel Awards. These included pre-heating to ensure excellent welds — with steel plating measuring 12mm to 25mm and 40mm to 50mm thickness, depending on where it was used — extremely accurate laser alignment for seamless assembly on site, and welding of exotic materials; as well as the application of three coats of industrial-specified paint to the steelwork, for corrosion protection,” he explains.

To meet the timeline of the approximately 12-16 week project – and running in parallel with the fabrication of the plant – was all the electrical and mechanical design, maintenance and operational access design.

“This influenced some of the steelwork, and on short notice, Betterect modified some of the components to cater for these factors, and the changes they required,” says Herbst.

Skjoldhammer points out that the project served as a perfect example of Betterect’s ‘Team Africa’ concept, whereby African countries and companies collaborate on the delivery of high-quality pan-African infrastructure projects, across a variety of industries.

“The project required extensive collaboration to transport cross-border into Mozambique, with sections of the route requiring police escort owing to the size of the components. Betterect however, is recognised for our vast experience and expertise within Africa, and we are perfectly positioned to undertake projects such as this one, throughout Southern and Central Africa,” she emphasises.

“Betterect is extremely proud of this project and our Steel Awards 2020 Industry category win, which is an amazing accolade. It also serves as an example to the local and international arena of what pan-African innovation and collaboration can achieve, and the high calibre of South African fabricators,” she concludes.

Construction sector is critical to SA’s post-COVID economic recovery

Traditionally, the development of risk management plans is tailored to address assessed and quantified risks. There is however always the ‘the unknown factor’. Enter the COVID-19 pandemic. Of course, we have faced localised pandemics before, but never one on such a globally synchronous scale, thanks to global travel and trade. It propelled the entire world into unchartered territory as mass economic and travel lockdowns were implemented, and contingency plans were hurriedly rolled out.  For many industry sectors and businesses already teetering on the brink, it has been a crisis of unprecedented scale – a black swan event that simply cannot be quantified or dealt with, without the benefit of hindsight.

According to

Traditionally, the development of risk management plans is tailored to address assessed and quantified risks. There is however always the ‘the unknown factor’. Enter the COVID-19 pandemic. Of course, we have faced localised pandemics before, but never one on such a globally synchronous scale, thanks to global travel and trade. It propelled the entire world into unchartered territory as mass economic and travel lockdowns were implemented, and contingency plans were hurriedly rolled out.  For many industry sectors and businesses already teetering on the brink, it has been a crisis of unprecedented scale – a black swan event that simply cannot be quantified or dealt with, without the benefit of hindsight.

According to Michael Viterenwa, Senior Broker in Aon South Africa’s Construction & Engineering Broking Centre, Government is the biggest spender on infrastructure in SA’s construction industry. “With the onset of our national lockdown, government diverted infrastructure spending to alleviate the economic and social crisis facing the country, cutting traditional expenditure by 80%.  This brought a large portion of the country’s economy, including the construction industry, to a grinding halt.  At the same time, restrictions on construction activity under lockdown regulations added further pain.  Projects were left standing, deadlines were missed – the consequences of which are enormous.”

Viterenwa goes on to detail some of the emerging and concerning trends impacting the construction industry – and while many existed prior to Covid-19 – they are now exponentially amplified:

Community Forums – Better known in the industry as the ‘construction mafia’, local ‘community forums’ have been springing up around virtually every construction project – from a commercial project to the roll-out of fibre in the suburbs.  Members demand their cut of the ‘work’ pie by applying pressure to contractors to employ local ‘community’ members, many who do not have the experience or skills required to perform the job. If contractors don’t comply, they are typically threatened with disruptions and even the safety of their employees and projects – some of these disruptions and threats are so severe that contractors are either forced to comply at huge cost, or in some instances, abandon the projects entirely as the situation becomes untenable and not worth the risk.  It’s a serious and growing threat to the construction industry and the much-needed infrastructure development in SA – law enforcement, local authorities and construction bodies need to find common ground to resolve this issue and regulate the practice – the practice is likely to worsen as South Africa shed a further two million jobs in the last quarter alone.

Pricing – With work and projects in short supply, pricing wars are leaving contractors exposed to the risk of unexpected costs or delays, that are often met with penalties that contractors will simply not be able to meet. Cutting corners and costs inevitably means cutting skills, quality and safety.

Currency – The Rand’s declining value against the US Dollar (26% in the last five years) has severe financial implications for an industry that relies on the import of machinery and specialised materials.

Supply Chain – Given the global nature of this crisis, supply chains across all geographies have been disrupted with extended and costly delays on key components and materials, not to mention skills.

Credit Risk – The failure of businesses across the spectrum is bringing capital availability problems into sharp focus.  Accounts receivable is often the largest uninsured asset on a company’s balance sheet, constraining cash flows and having huge implications for creditors when debtors go into business rescue or liquidation.

Skills Shortages – Uncertainty and volatility around politics and economics are likely to widen SA’s growing skills shortage as an exodus of skilled people takes place. Companies are under pressure to afford and retain top talent.  Increasing crime rates and growing social unrest as a direct result of the Covid-19 fallout are likely to further push skilled people into the arms of emigration to seemingly safer shores and better social structures.

Property Portfolios – During lockdown, many companies gave up their office space in a bid to cut costs as the work-from-home trend took hold. As a result, many companies are not spending on building new offices or renovating existing office space.  It’s likely to be a long-term trend as many corporates realise that staff can successfully work from home, and that prime floorspace might not be as necessary as once thought. Shopping centres and malls are also under severe pressure with many large retailers having to cull stores and jobs as a result of the lockdown and depressed consumer spending.

To say that times are incredibly tough and uncertain would be a gross understatement. In a bid to cope, many construction companies have cut capex by 50% – 60%, jobs have been cut, work hours have been reduced and property rentals in industrial and commercial properties are likely to never return to pre-COVID levels as remote working becomes part of the new normal.

“Construction companies, landlords, developers and contractors will need to explore ways of managing the impact and complexity of a radically changed environment.  It is vital to engage with all relevant parties to renegotiate contracts and clauses. These may include authorities, owners, lenders, contractors, subcontractors, suppliers, clients, and so on.  Aon Global Risk Consulting (AGRC) has been working with organisations to identify, assess and quantify the short- and long-term impact of Covid19 on construction projects which can then be used as a basis for negotiation with external stakeholders and help communicate the situation internally,” Michael explains.

To this extent, the approach consists of:

Identifying construction project components which can generate high financial impacts, from a cost and delay perspective.

Preparing a register listing and justifying each high financial impact and grouped by generating component.

Quantify the overall financial losses associated with each impact and creating multiple impact scenarios from a cost and delay perspective.

Comparing the results of impacts quantification to the contingency plans in place and existing insurance policies.

Insurance matters related to projects that are still on the go remains a concern. “Many companies are opting not to renew their insurance policies due to cost-cutting, which could be detrimental to their operations on projects that are still in progress. Companies have a legal obligation to ensure that cover is maintained up to the conclusion of a project, as the financial and liability repercussions could be catastrophic if anything should go wrong,” Viterenwa urges.

“The industry will pick up in the coming months and we are already seeing a commitment from Government to infrastructure spending, and positive signs on the energy front with a determination by mineral resources & energy minister Gwede Mantashe to procure 11.8GW of additional electricity in the coming years from Independent Power Producers.  Government has also committed to expedite the implementation of at least 50 infrastructure projects with a total investment value of more than R340 billion in the coming months as part of South Africa’s economic recovery plan.

“It is crucial that construction companies maintain their covers and conditions of cover as far as possible. As reinsurers and insurers prepare for their major renewal season in January 2021, they may find that they will not have access to the same type of cover, pricing and terms and conditions from insurers that they have now. A conversation with a professional broker that specialises in construction risk is crucial in order to anticipate any changes in policy wording, terms and conditions, pricing and potential exclusions  to maintain a workable and affordable level of cover during these trying times, and to avoid the potential for costly and potentially uninsurable liabilities,” says Michael.

As a key driver of South Africa’s economy, and a key pivot in the country’s post-COVID recovery, more than ever the industry sector needs to maintain and grow its resilience and embrace change to emerge leaner, focused, having mastered new technologies and a new world of work in a very different new normal. Suitably scoped insurance and risk management practices remain fundamental to being able to embrace risks for the opportunities they present in the coming months.

South Africa’s Construction & Engineering Broking Centre, Government is the biggest spender on infrastructure in SA’s construction industry. “With the onset of our national lockdown, government diverted infrastructure spending to alleviate the economic and social crisis facing the country, cutting traditional expenditure by 80%.  This brought a large portion of the country’s economy, including the construction industry, to a grinding halt.  At the same time, restrictions on construction activity under lockdown regulations added further pain.  Projects were left standing, deadlines were missed – the consequences of which are enormous.”

Viterenwa goes on to detail some of the emerging and concerning trends impacting the construction industry – and while many existed prior to Covid-19 – they are now exponentially amplified:

Community Forums – Better known in the industry as the ‘construction mafia’, local ‘community forums’ have been springing up around virtually every construction project – from a commercial project to the roll-out of fibre in the suburbs.  Members demand their cut of the ‘work’ pie by applying pressure to contractors to employ local ‘community’ members, many who do not have the experience or skills required to perform the job. If contractors don’t comply, they are typically threatened with disruptions and even the safety of their employees and projects – some of these disruptions and threats are so severe that contractors are either forced to comply at huge cost, or in some instances, abandon the projects entirely as the situation becomes untenable and not worth the risk.  It’s a serious and growing threat to the construction industry and the much-needed infrastructure development in SA – law enforcement, local authorities and construction bodies need to find common ground to resolve this issue and regulate the practice – the practice is likely to worsen as South Africa shed a further two million jobs in the last quarter alone.

Pricing – With work and projects in short supply, pricing wars are leaving contractors exposed to the risk of unexpected costs or delays, that are often met with penalties that contractors will simply not be able to meet. Cutting corners and costs inevitably means cutting skills, quality and safety.

Currency – The Rand’s declining value against the US Dollar (26% in the last five years) has severe financial implications for an industry that relies on the import of machinery and specialised materials.

Supply Chain – Given the global nature of this crisis, supply chains across all geographies have been disrupted with extended and costly delays on key components and materials, not to mention skills.

Credit Risk – The failure of businesses across the spectrum is bringing capital availability problems into sharp focus.  Accounts receivable is often the largest uninsured asset on a company’s balance sheet, constraining cash flows and having huge implications for creditors when debtors go into business rescue or liquidation.

Skills Shortages – Uncertainty and volatility around politics and economics are likely to widen SA’s growing skills shortage as an exodus of skilled people takes place. Companies are under pressure to afford and retain top talent.  Increasing crime rates and growing social unrest as a direct result of the Covid-19 fallout are likely to further push skilled people into the arms of emigration to seemingly safer shores and better social structures.

Property Portfolios – During lockdown, many companies gave up their office space in a bid to cut costs as the work-from-home trend took hold. As a result, many companies are not spending on building new offices or renovating existing office space.  It’s likely to be a long-term trend as many corporates realise that staff can successfully work from home, and that prime floorspace might not be as necessary as once thought. Shopping centres and malls are also under severe pressure with many large retailers having to cull stores and jobs as a result of the lockdown and depressed consumer spending.

To say that times are incredibly tough and uncertain would be a gross understatement. In a bid to cope, many construction companies have cut capex by 50% – 60%, jobs have been cut, work hours have been reduced and property rentals in industrial and commercial properties are likely to never return to pre-COVID levels as remote working becomes part of the new normal.

“Construction companies, landlords, developers and contractors will need to explore ways of managing the impact and complexity of a radically changed environment.  It is vital to engage with all relevant parties to renegotiate contracts and clauses. These may include authorities, owners, lenders, contractors, subcontractors, suppliers, clients, and so on.  Aon Global Risk Consulting (AGRC) has been working with organisations to identify, assess and quantify the short- and long-term impact of Covid19 on construction projects which can then be used as a basis for negotiation with external stakeholders and help communicate the situation internally,” Michael explains.

To this extent, the approach consists of:

Identifying construction project components which can generate high financial impacts, from a cost and delay perspective.

Preparing a register listing and justifying each high financial impact and grouped by generating component.

Quantify the overall financial losses associated with each impact and creating multiple impact scenarios from a cost and delay perspective.

Comparing the results of impacts quantification to the contingency plans in place and existing insurance policies.

Insurance matters related to projects that are still on the go remains a concern. “Many companies are opting not to renew their insurance policies due to cost-cutting, which could be detrimental to their operations on projects that are still in progress. Companies have a legal obligation to ensure that cover is maintained up to the conclusion of a project, as the financial and liability repercussions could be catastrophic if anything should go wrong,” Viterenwa urges.

“The industry will pick up in the coming months and we are already seeing a commitment from Government to infrastructure spending, and positive signs on the energy front with a determination by mineral resources & energy minister Gwede Mantashe to procure 11.8GW of additional electricity in the coming years from Independent Power Producers.  Government has also committed to expedite the implementation of at least 50 infrastructure projects with a total investment value of more than R340 billion in the coming months as part of South Africa’s economic recovery plan.

“It is crucial that construction companies maintain their covers and conditions of cover as far as possible. As reinsurers and insurers prepare for their major renewal season in January 2021, they may find that they will not have access to the same type of cover, pricing and terms and conditions from insurers that they have now. A conversation with a professional broker that specialises in construction risk is crucial in order to anticipate any changes in policy wording, terms and conditions, pricing and potential exclusions  to maintain a workable and affordable level of cover during these trying times, and to avoid the potential for costly and potentially uninsurable liabilities,” says Michael.

As a key driver of South Africa’s economy, and a key pivot in the country’s post-COVID recovery, more than ever the industry sector needs to maintain and grow its resilience and embrace change to emerge leaner, focused, having mastered new technologies and a new world of work in a very different new normal. Suitably scoped insurance and risk management practices remain fundamental to being able to embrace risks for the opportunities they present in the coming months.

PUBLIC PROCUREMENT PROCESSES LARGEST STUMBLING BLOCK TO ROLLING OUT PUBLIC INFRASTRUCTURE

In June this year, while National Treasury called for public commentary on the Draft Public Procurement Bill, President Ramaphosa held the Inaugural Sustainable Infrastructure Development Symposium (SIDSSA). Out of this, National Minister of Public Works and Infrastructure Patricia de Lille announced 276 projects aimed to fast track a “robust infrastructure pipeline” purported to set South Africa’s economy back on track and kickstart the flaying property development and construction industry.

Deon van Zyl, chair of the Western Cape Property Development Forum (WCPDF), believes there is a great deal of expectation on this very pipeline to help resurrect the private sector within the property development and construction industry.

“Ironically,” notes Van Zyl, “it is, to a large extent, the way in which the public sector has tied up our industry in red tape and legislation for years that has led to the critical situation we are now in.  Especially when it comes to procurement − which includes tendering − as well as planning and building approval processes.”

The WCPDF itself has delivered comment on behalf of the industry against the Draft Public Procurement Bill, noting that while the organisation believes the Bill is a valiant attempt at ensuring that procurement becomes more transparent and uniform across the country, it remains to be seen if the culture of change which the Bill proposes will filter down to local municipal levels, where the biggest problems lie in.

Chris Botha, the Chief Operating Officer of civil engineering and construction company, Civils 2000, agrees. The company has itself been in operation since 1992 in both construction as well as plant and machinery hire to the local construction sector. With tendering for projects in both the civil and private space being a very resource-intensive process at the best of times in terms of estimating and pricing, he notes: “Most contractors hope to have a funnel of work and to convert at least 10% of projects tendered into awarded projects.”

However, a huge frustration in terms of government projects is the withdrawal of tenders resulting in no awards being made at all, notes Botha: “And this is something that we’ve seen increase substantially over the past 12 to 18 months.”

Van Zyl adds that, with government’s own inability to get its projects to market, the construction industry is desperate for private sector projects to hit the ground: “Yet applications by the private sector are also severely hindered by government red tape and ineffective bureaucracies, with statutory approvals required just being too slow for projects to remain economically viable.

This means that private projects stagnate due to rising costs even before a shovel hits the ground, and thousands of  planned jobs in for construction workers in the most vulnerable of communities never materialise.

“So the contracting industry is being penalised on both public and private sector projects . Government is not spending money on its projects and is also actively delaying the spending by private sector clients on their own projects due to delays in processing applications,” explains Van Zyl.

On the hopes of achieving stability in the industry via the President’s proposed SIDSSA projects, Botha notes: “Any information that comes to the market and promises work is obviously good news for us. However, with the pain that the industry has had with the folding of many of the larger construction companies, we now need to see what the actual timelines will be of those promises unfolding.

After all, he says: “We’ve had the National Development Plan that’s been around since 2012 and how much of that have we seen?”

While Civils 2000 is in a position to enjoy a “50/50 balance between work for the public versus the private sector” Botha admits though: “On the public sector side, it’s extremely competitive and has become a very costly process just to tender.”

He cites the example of a recent large public sector project the company tendered for in East London: “In terms of manpower hours and out-of-pocket expenses, the tender process alone cost us about R400 000.”

However, at the end of the day, the local authority decided to go with a lower-priced win, which saw the technical aspects of the project slip substantially – a common occurrence among numerous municipalities.

Says Botha:  “That’s extremely frustrating because you hope most of your clients have the technical interests of a project to heart when they consider what they are buying. But, unfortunately, in the Western Cape, at municipality and sometimes even at provincial level, there seem to be different motivators to awarding projects.”

Van Zyl believes that trying to do work for government is becoming too costly for the private property industry and the process too risky, leading often expenditure on the part of the tenderer that will never be recouped: “The very process of government trying to limit its own exposure to frivolous and wasteful expenditure, is causing the private sector to incur frivolous and wasteful expenditure on its part.”

These are among the many concerns that the WCPDF has also noted in its response to the Procurement Bill, says Van Zyl, explaining that procurement procedures in the past have also been unable to distinguish between the procurement of day-to-day commodities versus the procurement of fixed capital investment assets and associated services.

“It may be fair to procure the lowest prices on consumables,” explains Van Zyl. “But to consider only the lowest prices on tenders aimed at building fixed capital assets, which are meant to serve the country for decades to come, should carry a strong weighting towards being ‘fit for purpose’ rather than just about price.

“If this is not acknowledged by the new Bill, then the government will continue to be guilty of not only wasting taxpayers’ money, but even putting the wellbeing of citizens at risk when the cheapest builds result in unsound structures. Something we are now seeing increasingly, particularly in the affordable housing market.”

The industry views procurement in such a serious light, that it is the topic of the last in the series of the WCPDF’s online “In Conversation” webinar, against the topic: “Procurement – Impeder or Enabler in Infrastructure Delivery,” to be held on Thursday 19 November from 14h00 to 16h00.

MORE ABOUT THIS WCPDF “IN CONVERSATION” WEBINAR

 To be held on Thursday 19 November, from 14h00 to 16h00, Dr Ron Watermeyer (Visiting Adjunct Professor, School of Construction Economics and Management, University of the Witwatersrand) will set the background for the discussion. Watermeyer is also the author (together with Sean Philips) of the March 2020 Draft Background Paper on Public Infrastructure Delivery and Construction Dynamism in the South African Economy. This was part of the National Planning Commission’s Economy Series contributing towards the understanding of progress towards the National Development Plan Vision 2030.

 Dr Watermeyer will be in conversation on the 19th with Alwyn Laubscher (COO of AL&A), Assoc Professor Kathy Michell (Head of Department: Construction Economics & Management, University of Cape Town) and Prof Geo Quinot (Department of Public Law, Stellenbosch University.)