Civil Engineering April 2022 | Vol 30 No 3

Civil Engineering April 2022 41 “A s a cash-strapped country with low economic growth prospects, it is now more imperative than ever that we spend our money wisely,” states Chris Campbell, CEO of CESA. “When you are looking at the cost of an infrastructure project you need to consider the total cost of owner- ship spanning the typical 30 years or more of the project lifecycle,” he adds. This lifecycle includes planning and design, construction, operations, and maintenance. The planning and design services typi- cally only make up 2% of the total cost of ownership but have a major impact on the more than 80% long-term costs of operation and maintenance of the project. It is therefore critical that during the planning and design phase one procures the best engineering services, offering the latest innovation, and not merely the cheapest services. “You cannot procure infrastructure services in the same manner that you procure ball point pens, on the basis of the lowest price – in doing so, you will regret the long- term implications of the cost of operations and maintenance of the infrastructure. “We are not suggesting that you go for the most expensive solution but rather opt for a quality cost-based selection, where evaluation is based on cost as well as technical capability with quality being the most important factor,” argues Campbell. Paying the least amount of money for planning and design services for an infrastructure project with a lifespan of 30 years or more is counter intuitive. “The impact of the failure of such infrastructure, if not properly designed and planned, can have a negative impact on the lives and the livelihoods of citizens for whom these projects are intended to benefit and create a conducive environment for economic growth,” adds Campbell. “We have for some time been ‘beating the drum’ on the need for value for money and quality delivery in our infrastructure investment pur- suits. It is with great excitement that we hear the minister make this very statement in his budget speech. As an industry we welcome the implementation of this approach.” CESA is also eager to contribute to the re- vised Public Procurement Bill that will be tabled before Parliament in 2022/23, particularly in light of the recent Constitutional Court judgement on the preferential procurement regulations, and the first Zondo Commission report highlighting abuses in state procurement. CESA is also pleased to hear that government plans to take bold steps to improve state capability and reduce the scope for procurement corruption.  “The genie is now out of the bottle in the form of a massive surge in inflation the likes of which we have not seen in 40 years in the world economy,” he observed, adding that South Africa’s inflation rate is below that of the US for the first time in 30 years. SA ECONOMY: A CLOSER LOOK Referring specifically to South Africa’s budget, Jammine said SARS had collected R182 billion more in taxes than antici- pated, with this economic windfall giving Minister Godongwana considerable leeway in formulating the budget. This windfall was largely due to increased payments by the mining industry as a result of mining companies having benefitted from the cur- rent surge in commodity prices. Turning to some of the specifics of the South African economy, Jammine noted that construction has been the weakest sector of the economy over the past decade and now accounts for just 2.5% of GDP. This is due to gross capital forma- tion in South Africa having declined, as a percentage of GDP, from 19% around 2014 to the current 13%. Despite this decline, Jammine believes the construction industry could receive a big boost from an increase in infrastructural spending. He noted that 51 well-defined projects worth R340 billion had been identified in the 2020 Economic Recovery and Construction Plan and that the project pipeline has since been expanded to include an additional 55 projects worth R595 billion. This amounts to a grand total of R935 billion, representing 126% of total annual fixed investment. He argued that if all – or even just some – of these projects were implemented it would be a game changer for the industry and a major boost to the economy, with growth increasing by as much as 2% a year.  SA cash strapped – CESA echoes minister’s sentiments Reflecting on South Africa’s 2022 budget, Consulting Engineers South Africa (CESA) was pleased to hear that government is looking at value for money and quality of delivery as the top priority in the development of the project pipeline. This is particularly important to ensure the sustainable development of infrastructure. CESA CEO, Chris Campbell