Construction World April 2019

and liquidation as a result, while for subcontractors with no cash flow, the wait of 180 days or longer for government payment is devastating.” Another challenge, he says, is local business forums demanding a 30% procurement allocation on every construction project, usually leading to delays, costly training and a risk to project quality. Shangase says: “The Group Five news underscores the fact that the continued slow release of infrastructure projects and payments will impact the sector, with more major construction industries going into collapse if these problems are not given workable solutions.” Shangase says 2018 was a challenging year for the MBA, for the construction industry as a whole and for the economic growth of the country. He told the recent MBA North AGM: “On the construction industry front demand for new construction work remains a constraint and activity growth is likely to remain under pressure in the near future. From cidb grades perspective, confidence fell to historic lows of 25 and 15 for Grades 5 and 6, and Grades 7 and 8, respectively. The Construction Industry Development Board (cidb) small and medium-sized enterprises (SME) business conditions survey has shown that civil contractor confidence fell by six index points

to a historic low of 27 during the third quarter. Weakness in all the underlying indicators, especially construction activity, contributed to the drop in confidence. Meanwhile, general building confidence has been trending downwards since early 2017. During the third quarter, business confidence shed three index points to 30 and the South African economy grew by 2,2 % q-q following two consecutive quarters of negative growth in the first two quarters of the year of -2,6% and -0,4% consecutively. The growth in the 3rd quarter is mainly attributed to the manufacturing, transport, finance and business services sectors. However, the construction sector contributed negatively to the GDP with -2,7% in the third quarter. This is a trend that has prevailed since 2013 when the industry was in the headlines for all wrong reasons. “In light of the infrastructure budget again being compromised and funds reallocated elsewhere, our concern is that we have fallen behind in terms of the NDP goals. If we want to achieve the growth goals envisaged in the NDP, we need to invest in infrastructure development now. But unfortunately, the NDP has been on the shelf since 2013. At this stage, the only positive note is the fact that we have a plan, but unless it is executed, our industry will die and South Africa’s economic growth goals will not be realised,” he says. 

AECOM, a premier, fully-integrated global infrastructure firm, recently announced it is honing its strategic focus across the Middle East and Africa by integrating regional operations as well as consolidating its African presence. HONING REGIONAL FOCUS

Left: AECOM MD for East Africa, Bridget Ssamula. Middle: AECOM Middle Eastern and African Chief Executive, Hamed Zaghw. Right: AECOM Middle Eastern and African Chief Operating Officer, Jason Kroll.

“W e are incredibly proud to be involved in some of the biggest infrastructure projects across Africa, including the USD1,5-billion Tema Port Expansion Project for Meridian Port Services in Ghana,” said Joe Ndala, AECOM’s Managing Director of South Africa and Chief Financial Officer for the African operation. “By consolidating our presence in Africa and bringing it together with our Middle East business, we’re able to focus on solving the region’s most significant infrastructure challenges, including improving water-and transport-related infrastructure and broadening industrial capacity.” One of the priorities for the newly consolidated region is to promote awareness among the firm’s client base of the company’s extensive suite of services, which includes the latest Building Information Modelling (BIM) technologies and Artificial Intelligence (AI). Such technology is being deployed not only for project management, but also for quality, cost control and maintenance. Ndala’s recent appointment to the managing director role coincides with additional leadership changes across the region,

including Bridget Ssamula’s promotion to managing director for East Africa. Additionally, the Middle Eastern and African regions will merge under the leadership of Hamed Zaghw as chief executive and Jason Kroll as chief operating officer. “With the restructuring of our businesses in Africa, our teams are more agile and better equipped to help our clients implement strategic innovations, help to reduce their costs and addressing their various needs,” Ndala comments. In relation to the R400-billion infrastructure fund announced by South African President Cyril Ramaphosa to kickstart the local economy, Ndala sees this opportunity as a medium to long-term project pipeline. “Electricity is not only a vital resource for modern infrastructure, but also part of the foundation to economic growth.” In addition to South Africa, Ndala points to Mozambique, Tanzania, Angola and Uganda as promising markets, especially in terms of the oil and gas industry, which represents a major growth opportunity in Africa and an area in which the firm can leverage its Middle Eastern experience and expertise. 

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CONSTRUCTION WORLD APRIL 2019