Construction World November 2018

COVERING THE WORLD OF CONSTRUCTION

NOVEMBER 2018

WORLD

CR O WN

P U B L I C A T I O N S

Improved PRODUCTIVITY and DEPENDABILITY from SDLG

“It doesn’t matter what the contract says if it’s not fair” MONTHLY COLUMN:

N2 UPGRADE SHOWCASES CONTRACTOR’S EXPERTISE

GREEN BUILDING IN SA CONTEXT

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CONTENTS

06 A paradigm shift Scania tippers are proving themselves more efficient than traditional yellow metal haulers.

22 Large bridges showcase expertise The upgrade of the N2 in KZN required many big structures.

25 Urban design inspired by its environment Kyalami Corner’s design is sustainable and representative of its equestrian setting. 26 DCT Berth deepening project to commence An upgrade at the Port of Durban will enable it to accommodate new container vessels. 30 Combined office and dealership scheme Abland recently started with a development that combines office and retail space.

08 WC construction industry optimistic Despite enormous challenges, the MBAWC is positive about the future.

12 Fixing the leakage in infrastructure investment CESA is cautiously optimistic about Government’s stimulus package.

14 Fourth Industrial Revolution upon us Businesses will not survive if they do not embrace change.

18 A core value AECOM discusses green building in the South African context.

32 Ntshongweni urban development go-ahead The 2 000-hectare development is located 30 km north of Durban.

33 On track Rosebank Link is an iconic building in Rosebank.

36 A formwork game-changer A versatile new formwork beam is changing the face of the concrete forming industry.

REGULARS

04 14 18 22 24 52 54

Marketplace

Property

Environment & Sustainability

ON THE COVER

Project Profile

Babcock has extended its range of cost-effective and reliable SDLG construction machinery in Southern Africa with the introduction of the new G9220 motor grader and B877F backhoe loader. Efficient and versatile, these machines are designed to provide reliability in action, backed by Babcock’s high quality service and aftermarket support. The upgrades to SDLG’s value-added range of construction equipment have shown to deliver improved productivity and dependability while maintaining affordable prices. Read the article on pages 20 and 21.

Projects & Contracts

Equipment

Products & Services

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COMMENT

The judging for the 17 th Best Projects Awards was done on 3 October. Best Projects is the only award that recognises excellence across the entire construction industry. Projects are independently judged – by submission only. This year the competition attracted 53 entries – a fewmore than last year. The winners will be announced at the awards function in Johannesburg on 31 October.

The judges – Trueman Goba, Rob Newberry and Nico Maas – have, over the many decades they have been in the industry, seen the construction industry peak and dip. In what is a difficult time for the construction industry, they commented how encouraging it was to see the quality and diversity of construction projects in the country. Some categories needed robust discussion as the score between the Winner and Highly Commended was often slight. In the end, the choice of winners was unanimous. Hope for the future “I enjoy being part of such an important event. This year’s entries really gave me hope for the future of South Africa,” said Nico Maas, who is a past President of the MBSA. Rob Newberry, who has been a Best Projects judge since its beginning in 2002 and who is a past President of the CIOB, refers to Best Projects as the ‘gold standard’ in the industry. Trueman Goba, Hatch Africa’s Chairman, who has also been a Best Projects judge from the start, was highly impressed by the standard of the submissions. The ‘AfriSam Innovation Award for Sustainable Construction’ was one of the most tightly contested categories. This award was the first in the country to recognise how construction can benefit

people, the planet and profit: civil engineers, builders, architects and consulting engineers all compete for this Award. The competition in the Building Contractors and Consulting Engineers categories was equally tough with various iconic structures entered. In stark contrast to the healthy number of projects in these categories, only four projects competed in the Civil Engineering category – a barometer of the tough time the civil engineering industry is going through. Hopefully the government’s stimulus package and increased activity in the run-up to next year’s election will change this. The value of Best Projects The Best Projects Awards ensures that entrants receive wider recognition – not just from their own professional organisations. The continued good number of entries is proof that the construction industry regards this initiative as having value. At the height of the construction boom, Best Projects had 72 entries. For the past five years, the Awards have consistently attract between 50 and 60 entries. This is proof that excellence continues, despite challenges.

Trueman Goba (far end) and Rob Newberry reviewing the entries for Best Projects.

Our third judge, Nico Maas. He says this year’s crop of entries gave him renewed hope for the future of South Africa.

Wilhelm du Plessis Editor

@ConstWorldSA

www.facebook.com/construction-worldmagazinesa

EDITOR & DEPUTY PUBLISHER Wilhelm du Plessis constr@crown.co.za ADVERTISING MANAGER Erna Oosthuizen ernao@crown.co.za LAYOUT & DESIGN Adèl JvR Bothma CIRCULATION Karen Smith

PUBLISHER Karen Grant PUBLISHED MONTHLY BY Crown Publications cc P O Box 140 BEDFORDVIEW, 2008 Tel: 27 11-622-4770 • Fax: 27 11-615-6108

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The views expressed in this publication are not necessarily those of the editor or the publisher. PRINTED BY Tandym Cape

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MARKETPLACE

AfriSam’s CPE works with customers to identify the most suitable product and process to optimise their operations.

SHARING EXPERTISE TO EMPOWER As part of its commitment to social and economic upliftment, construction materials leader AfriSam puts its Centre for Product Excellence (CPE) at the service of small players in the concrete product manufacturing (CPM) sector – with great results.

W hile the ranks of CPMs include a number of large and well-resourced companies, there are still many small and medium-sized enterprises (SMEs) in this industry that need support to become sustainable. These operations often lack the in-house expertise and experience to fully optimise their production costs, often leaving them uncompetitive. To help build a sustainable construction industry through empowering SMEs with the necessary knowledge and advice, AfriSam’s CPE offers its technical skills and facilities at no charge to its SME customers. Significantly, this support is offered across the country. In tough economic times especially, this can often give the customer the necessary edge it needs to survive and thrive. Working with its customer Opehst BCM,

a new business near Rustenburg, the CPE team was able to advise on the best cement and the most efficient process to make bricks, blocks and palisade walling with chrome slag instead of stone aggregate. Using AfriSam’s High Strength cement (42.5R) – to achieve high early strength – Opehst has been able to produce good quality products at low cost. It has entered the market with a competitive offering of products whose quality conformed to South African Bureau of Standards (SABS) requirements. At Smartcrete in Centurion, the CPE was able to help improve the casting rate so the customer could keep up with growing demand without overly raising its cost base. Through the use of AfriSam’s Rapid Hard cement (52.5R), as well as a superplasticiser admixture and accelerator

One of the key benefits of AfriSam’s Rapid Hard Cement is that it offers fast strength gaining qualities, allowing for quick turnaround and form stripping. combination, Smartcrete successfully ramped up the output of its concrete tables, windowsills, wall caps, wall copings, stairs, treads, water channels and spouts. 

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MARKETPLACE

A PARADIGM SHIFT

In civil engineering – just as in mining – moving payloads for less is directly linked to the effectiveness of a contractor’s equipment – and the bottom line. An example of a fleet that optimises payload, is the Scania mining tipper which is proving its worth for a Zimbabwean mining contractor: it is effective, has high availability, allows optimal utilisation, gives maximal productivity, has quick cycle times, and offers optimal fuel consumption.

A consequence of tailoring Even though these Scania vehicles are adapted for the mining industry, the basic principle remains: bodies are tailored to be bodied on – a well proven ingredient of Scania’s success. Scania vehicles are renowned for their optimal fuel consumption, but this is a consequence of tailoring. “When a vehicle is tailored to a specific type of transport, the fuel consumption will be optimised,” says Theuns Naude, Segment Manager Construction/Public and Special at Scania South Africa. As is the case in mining, transportation in a civils context accounts for up to 30% of total costs. It is therefore imperative that contractors regard the efficiency of their hauling gear as the most important consideration for profitability. However, conventional thinking gets in the way of identifying the most cost-effective ways for improvement. While civil contractors and mining companies are starting to understand that productivity carries a value, many still do not have the correct information to make informed choices on the rewards involved. Daniel Perlman, MD of Scanlink (left) and Mike Davis, MD of R. Davis and Co. Scanlink is Scania’s authorised distributor in Zimbabwe.

One contractor has made the shift There is an increased migration from conventional yellow metal haulers to on-road type of haulers, such as Scania’s mining tippers. While this solution has gained popularity in developed markets, local miners and civil contractors still need a complete paradigm shift when it comes to their selection of hauling gear. In general, industry still favours yellow metal solutions. However, it’s encouraging that local mines and civil contractors are starting to look for ways to reduce the gap between earnings and operating costs. Making the paradigm shift To minimise operating costs and maximise earnings, R. Davis and Co., a mining contractor operating in Zimbabwe, has chosen to deploy Scania mining tippers at its gold mining project at the Cam and Motor Gold Mine, operated by Rio Zim in Eiffel Flats, near Kadoma. Up to recently it operated yellow metal haulers. Then R. Davis and Co experienced the Scania mining tippers’ capabilities when it took two G380 8x4 first generation mining tippers on hire from another Zimbabwean contractor. This led to the decision to invest in its own first four G410 8x4 (single-cylinder) mining tippers in June 2017, before boosting the fleet with

Daniel Perlman, MD of Scanlink, Scania’s authorised distributor in Zimbabwe. According to Mike Davis, the MD of R. Davis and Do., the Scania tippers are currently deployed to haul run of mine material (ROM) from the pit to the processing plants at the Cam and Motor Gold Mine. “We are more than pleased with their performance. We have experienced greater fuel economy, good cycle times and minimal downtime with our Scania vehicles,” explains Davis. Tailoring the fleet R. Davis and Co. owns 18 articulated dump trucks and eight Scania mining tippers. Currently, only the eight Scania tippers and two 35 t ADTs are operating at the Cam and Motor Gold Mine project. Claudius Nhongonhema, mine manager at R. Davis and Co., explains that the Scania tippers are hauling ROM from the pit, at a pit depth of 50 m, to the processing plant, over distances of 1,6 km. The tippers are also deployed to haul waste material to the dump, at a haul distance of 1,4 km and a climb of 70 m. The first four G410 8x4s delivered last year are single-cylinder mining tippers. Theuns Naude says that the client struggled with cycle times in the first place. Experts from both Scania South Africa and Scanlink visited the site late last year to look at possible areas of improvement. “We managed to slightly improve the cycle times on the single-cylinder units by increasing the oil flow pump from 80 to 100 ℓ , as well as increasing the tipping speed,” explains Naude. To further improve the cycle times, R. Davis and Co. was this year introduced to Scania’s twin-cylinder mining tipper. It purchased four units which were delivered in August this year. “The new tippers with a dual cylinder achieve a 30-second tip and return cycle compared with 55 seconds on the first four single-cylinder tippers,” says Perlman. “They also offer 1,3 m³ more payload than the older tippers. We have also fitted them with rock ejectors to protect the rear tyres.” “The performance of the vehicles has been beyond our expectations. We are

another four G410 8x4 (dual-cylinder) tippers delivered at the start of August this year. What impressed the customer “The customer was impressed with the two Scania 8x4 first generation mining tippers on hire. We were then able to demonstrate that with extra payload (32 t) of the mining tipper range, their cost per tonne would be even better. To date, they are operating eight Scania G410 8x4 mining tippers of their own,” says

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To further improve the cycle times, R. Davis and Co. was this year introduced to Scania’s twin-cylinder mining tipper. It purchased four units, which were delivered in August.

currently moving 32,4 m³ per hour of product on the older Scania trucks and 33,75 m³ per hour of product on the new tippers. The vehicles run two shifts per day,” explains Nhongonhema. Improvements all around One of the most noticeable improvements has been the fuel efficiency. Consumption varies from 7,75 to 8,27 ℓ /hour on the Scania tippers, compared with 18 ℓ /hour with the articulated haulers working on site. Uptime and equipment availability are some of the key operational gains to date. “The first four Scania tippers, in operation since June 2017, have done between 3 500 and 4 000 hours and the only breakdown we experienced was that of a leaking radiator hose on one of the trucks. This was a very simple repair which Scanlink attended to timeously and efficiently as part of warranty,” says Davis. “In a nutshell, the tippers are performing well for us; the productivity is excellent and operational costs are just over 50% of the costs of operating a comparable ADT – so we are moving more payloads at lower running costs and much lower downtime. We are looking at further boosting our fleet with four more Scania tippers later this year or in early 2019,” adds Davis. The contractor is also looking at five-year replacement cycles for its current range. Apart from the product, Davis is impressed by the aftersales service from both Scania and Scanlink. “When we had issues with slow tipping speeds on the first four trucks, Scania South Africa and Scanlink, together with bodybuilders from Pretoria, South Africa, came to site to look at possible areas of improvement,” explains Davis. “They advised that the hydraulic pumps were under specification for the work at hand and replaced them all at no cost to R. Davis and Co. An effective solution to resolve the tipping speed was implemented timeously.” Mining and infrastructure Zimbabwe’s mining industry is expected to grow by 10% this year, according to the Chamber of Mines of Zimbabwe, following

Scania and Scanlink helped the customer improve the cycle times on the single- cylinder tippers by increasing the oil flow from 80 to 100 ℓ .

a successful year in 2017, with an overall growth of 8,5%. The COMZ predicts that the sector will generate USD3,7-billion in 2018. The industry is expected to reach US$11- billion by 2022, and USD18-billion by 2030. “We believe that investments into mining

and infrastructure development will further drive the market in Zimbabwe. The only hiccup at this stage is the liquidity issue, but the country has greater potential for development in the short term,” concludes Naude. 

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MARKETPLACE

NEW BUSINESS DEVELOPMENT LEAD FOR EAST AFRICA Integrated infrastructure delivery company AECOM has appointed João Ramos as its Business Development Lead for Civil Infrastructure in East Africa as of 18 June 2018. Ramos is a professional civil engineer, with a Master’s of Science in Civil Engineering from the Technical University of Lisbon, Portugal.

R amos’ extensive experience in the East African region includes business development, commercial development, project management, procurement, budgeting, and design engineering. His experience extends to projects such as the International Airport of Nacala, the Palma Residence Hotel, MEREC’s flour factory, the largest in Mozambique, and Rural Health Centres for USAID.

He is also a registered professional and founding member of the Portuguese Business Council in Kenya. Ramos joins AECOM from Anguloraso, a company specialising in project management and engineering services in construction, with a footprint in seven countries, and where he was the Country Manager for Kenya. “This senior appointment reflects our strategic commitment to grow our civil

New Business Development Lead for Civil Infrastructure in East Africa, João Ramos.

infrastructure market sector offering in East Africa. It will assist in positioning AECOM as the leading and fully integrated global infrastructure firm in Africa,” Darrin Green, MD for Civil Infrastructure, Africa, comments. 

WC CONSTRUCTION INDUSTRY OPTIMISTIC

The revelations tumbling out of the Parktown Pandora’s Box opened by the Zondo commission will certainly mean that, due to the previous nine years of looting public coffers, public spending on long- awaited infrastructure projects will simply not happen in the near future. If the lack of government spending was not a big enough blow to our industry, the talk of land expropriation, a declining Rand and, closer to home, drought, continued destruction of Metrorail train carriages and ongoing service delivery protests, would seem enough reason to knock the lights out of any private building initiatives as well.

T his is according to John Slingsby, President of the Master Builders Association of the Western Cape (MBAWC) – a registered trade association for employers in the building industry. He unpacked the state of the industry in South Africa generally, and the Western Cape in particular, at the organisation’s Annual General Meeting. “While the construction industry has managed to put food on my family’s table for more than three generations, this last year has been a tough one for all of us. However, we need to be patient given the very poor hand that our new President Cyril Ramaphosa was dealt. Despite the emotional concerns around land reform, to-date he has been doing the right things to get the country back on track. After many years of mismanagement and a very poor economy, there are rays of hope that will hopefully transform into improved economic

growth in the next six to 12 months. Successful recent talks with China and the UK all bode well for a cash injection into our distressed economy, which will hopefully pave the path to recovery. Even though we will have to wait for these investments to bear fruit, there is still construction activity in the Western Cape – a good sign during this dark spell. You only need to take a short drive along the Atlantic Seaboard to notice the amount of developments that are going up. Any astute private developer surely knows that there are quality builders, subcontractors and suppliers who will provide their services for a reduced cost in these times. The number of these developments are also a testament to how sought after the Western Cape actually is.” Slingsby concluded by saying that despite current tough times, it is important that we work together and be prepared for the inevitable upturn. 

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MARKETPLACE

MAJOR BOOST FOR EMERGING CONTRACTORS Emerging contractors in the construction industry will now be better able to participate in major projects following a landmark agreement between SANRAL and Barloworld Equipment, the dealer for Cat earthmoving machines and Cat power systems in Southern Africa. “This will enable us to deliver on our incubation and empowerment commitments and work with SANRAL towards the greater goal to transform the engineering and construction sectors,” says Vasco Santos, Executive Head: Construction, Rental & Used at Barloworld Equipment. The Memorandum of Understanding, signed in Sandton today sets out future cooperation between SANRAL and Barloworld Equipment across a broad range of activities, including providing small contractors in the SANRAL supply chain access to equipment, financing and training.

T he Cat dealership will give black-owned enterprises greater access to equipment, financing and training which will enable them to tender more effectively on road construction projects managed by SANRAL. “This will open up the industry to new participants and remove many of the barriers that prevent companies owned by black, women and youth entrepreneurs to compete effectively against the entrenched players in the construction sector,” says Skhumbuzo Macozoma, the Chief Executive Officer of SANRAL. “Through our co-operation with Barloworld Equipment we are promoting the growth of black business and taking positive steps to support a sector with immense potential for growth and job creation.” This is the second Memorandum of Understanding between SANRAL and a top industrial company to support the growth of emerging contractors. Emmy Leeka, CEO of Barloworld Equipment southern Africa says this is an opportunity to contribute to the empowerment of emerging contractors in the construction industry. “We have built valuable partnerships with black-owned enterprises through the years and this initiative will take our activities to a higher level.

Barloworld Equipment will set up structures which will enable contractors to benefit from options to lease or rent equipment. The company will also offer training to owners, employees and maintenance staff. Together, SANRAL and Barloworld Equipment will promote partnerships in the fields of training, fleet management, marketing and communication. Macozoma says the partnership is proof that SANRAL’s efforts to transform the construction sector and promote fair competition are delivering results. Lack of access to sophisticated machinery and equipment is a major barrier for small contractors and prevents them for participation in large construction tenders. “By working together with established companies, we can remove these barriers and enable black-owned companies and enterprises owned by women and the youth to participate on a level playing field,” he says. “This step will, no doubt, have a ripple effect within the construction and engineering industries and also benefit job creation within local communities where smaller enterprises now become part of the supply chains on larger projects.” 

SANRAL CEO, Skhumbuzo Macozoma (left) and Barloworld Equipment SA CEO, Emmy Leeka.

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A lbert Weber, CEO of ISG said, “ISG regularly evaluates and reviews its operational activities to ensure that our long-term strategies and objectives remain on track. After a careful analysis, the Board decided to focus on the core business that Rocla and Technicrete afford the group, and therefore decided to sell Ocon Brick” “With the strong demand for Technicrete and Rocla manufactured products in the industry and with Governments committed spend on infrastructure we see a bright future for the businesses. Both brands are well established industry leaders, our long-term strategy is to grow and further enhance our service offering to the industry” Weber said. Weber continued to say: “On behalf of the IS Group I would like to thank management and the entire team at Ocon Brick for their dedicated contribution to Ocon’s success during the past five years that they have been part of ISG”. Rocla and Technicrete are South Africa’s key manufacturers and suppliers of precast concrete products that service the infrastructure building and mining sectors nationally and in neighbouring countries. Rocla celebrated its 100 th birthday in 2017 and Technicrete celebrates 50 years of operation in 2018.  BRICK MANUFACTURER SOLD The Infrastructure Specialist Group (ISG) has announced the sale of clay brick manufacturer Ocon Brick to Willem Pienaar and his partner Mike Koch.

Albert Weber, CEO of ISG.

PART OF COMMITMENT TO SA Steadily integrating its continuous improvement efforts alongside the transformation of its business, the Zest WEG Group recently achieved Level 1 status in terms of Broad-based Black Economic Empowerment (BBBEE) ratings.

required by the Codes of Good Practice, and this includes creating skill-sets for our business that currently do not exist in the local marketplace,” he says. He highlights that leading technology from WEG’s plants in Brazil is also being shared with South African operations, whose facilities will benefit considerably from the skills transfer; this will allow the local engineering operations to become more independent in terms of knowledge and skills. 

A subsidiary of the Brazil-based multinational WEG, the Zest WEG Group is over 51,6% black-owned, including a 32,1% stake by black women, and was ranked as Level 2 last year. “Our real success here has been to ingrain our commitment to South Africa and to transformation in the everyday activities and culture of the business,” says Zest WEG Group Chief Executive Officer Louis Meiring. “Our empowerment journey is not an annual tick-box exercise, but rather is driven by every staff member working to build local capacity, people and excellence.” He emphasises that the business model has evolved to engage all employees in maintaining the group’s focus on quality and transformation. Reaching this pinnacle BBBEE rating has been the culmination of various efforts, according to Zest WEG Group operations director Juliano Vargas, and is just one indication of the investment that the group is making in the country’s economy and society. “We continue to invest in local manufacturing and are improving our facilities to achieve high levels of quality and productivity,” says Vargas.

“This also means developing the skills necessary and increasing our knowledge base in the latest technologies related to our production requirements.” From its position as an ISO 9001-listed business, Zest WEG Group was recently one of the first to upgrade to ISO 9001-2015, making it one of only 112 companies out of 2,200 South African firms with ISO 9001 certification to reach this next level. The group has also recently invested heavily in its Heidelberg transformer manufacturing plant, where it operates one of the country’s leading test laboratories for transformers. “We are also moving strongly into the renewable energy space, and this will support government efforts to develop this sector of the economy – as outlined in its recent Integrated Resource Plan,” says Vargas. “Our product expansion includes items like steam turbines, wind turbines and solar panels.” The focus on continuous improvement has been necessarily accompanied by developing its skills base in industrial manufacturing and engineering, well beyond the legal requirements of BBBEE. “When it comes to skills development, we invest at least double the percentage

Louis Meiring, Zest WEG Group CEO and Juliano Saldanha Vargas, Group Logistics and Operations Director at Zest WEG Group with the certificate Zest WEG Electric received for its Level 1 BBBEE rating.

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MARKETPLACE

FIXING THE LEAKAGE IN INFRASTRUCTURE INVESTMENT President Cyril Ramaphosa announced Government's eagerly awaited economic stimulus package at a briefing in Pretoria aimed at driving economic growth.

derive savings in the remaining 97% cost component of the investment.” Fixing the problem Campbell asks, “How do we then indeed fix this problem? We can start by appointing recognised companies with the appropriate expertise and capacity to do the upfront engineering, planning and design. We have at least 550-member companies and there are probably other credible companies who are members of our partner industry associations. Starting with companies affiliated with these credible organisations is the first step towards stemming the tide against bogus service providers. "Optimising monies invested from a total cost of ownership perspective in infrastructure starts with the first 3% invested in the procurement of the appropriate consulting engineering services. Essentially then we need to also dispense of the notion of expecting discounts on these professional services. Such demands are not made of legal or medical professionals so it is hard to understand how such a simplistic a practice would be encouraged as it only destroys value in the process." Campbell states, “We should learn from evidence from other countries, such as in Quebec, Canada why such practices are destructive if we indeed choose not to listen to our own local professionals. We need to discourage this counter-intuitive approach to procuring professional services if we are going to make optimal investment in infrastructure. The public sector as the owner and custodian of our public infrastructure should set the example for optimally managing the process of ensuring that we invest holistically in infrastructure and not simply assume that procuring the services of professional consultants at least cost with discounted fees, is responsible behaviour on behalf of government, the main investor in infrastructure.” Capacity challenges CESA is aware of the capacity challenges and the dire shortage of procurement

W hile Consulting Engineers South Africa (CESA) applauds this bold move by our President aimed at kick-starting our economy and creating jobs, with the limited public funds that are available, the organisation believes that it is critical that these funds are used responsibly to gain true ‘value for money’. Chris Campbell, CESA CEO states, “Over the past few years we have embarked on a campaign of partnerships with Government in order to assist and advise the public sector on how to maximise investment in infrastructure and ensure that they have the correct capacity in place to design and implement large-scale projects that will stand the test of time.” CESA believes that the first step in the process would be to call out corruption where it is still taking place. It has to stop. “Blatant corruption, namely, getting paid for professional services and delivering nothing, is bad. Appointing companies for infrastructure projects who lack both the capacity and the expertise and simply ‘sell-on’ projects adding no value to the process is equally bad. We would argue that this is tantamount to fronting and defeats the objective of developing future capacity in the Consulting Engineering industry, as part of a credible transformation process for our industry. Often too, Supply Chain Management Regulation, Section 32 is misinterpreted and abused to make such appointments possible and often goes unnoticed and unchallenged,” says Campbell.

Campbell states, “To put this in its fullest context we need to understand that public sector investment in infrastructure is often no less than a 30-year investment, sometimes in excess of 50 years, especially when we look at major roads, bridges and dams. The upfront planning and design phases could take between three and five years before construction commences and the relative lifecycle cost contribution to the infrastructure investment is as little as 3%. “The next stage, construction, constitutes a cost contribution of 20% and may take place over a period of between three and five years. Therefore, after a period of six to 10 years an investment of up to 23% of the total cost of ownership has been expended even before the infrastructure has been rendered available for use. Public sector entities are then left with an asset which is meant to last for a minimum of 30 years provided that it is correctly utilised and regularly maintained. The latter is known as the operation and maintenance phase. This phase in reality constitutes the remaining 77% of the total cost of ownership in the investment process. “Our current public infrastructure procurement process counter-intuitively drives costs down in the 3% area when appointing Consulting Engineering professional service providers and seems to be oblivious to the opportunity to rather invest more in this phase so that the best professional service providers can maximise the quality of service that would

“We desperately need to focus on the role infrastructure investment plays in stimulating our economy by not only spending more money but spending it right.”

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practitioners in the public sector who understand the difference between procuring for infrastructure development and general procurement. Campbell says, “It is for this reason that we volunteered our offer of partnership with the State shortly after the President made his ‘Thuma Mina’ address during his inauguration earlier this year. Unless we act to correct this flawed process, we will not as a country be able to afford to operate and maintain these assets optimally, as potential ‘in-built’ shortcomings through cheap designs, poor equipment choices and lack of quality supervision during construction will mean more frequent maintenance at higher cost to operations or simply that maintenance will be deferred or not done. This means re-capitalising these assets long before the 30 year design life has been reached. You end up spending twice as much in half the time.”

Campbell says, “We unashamedly would rather advocate for a more informed and holistic approach to be adopted, one that drives investment in infrastructure with a ‘long game’ vision, to use a good golf analogy. We need to drive this in a manner that ensures that future generations are not saddled with the plague of early failure of functional infrastructure or unsafe infrastructure and the continuous challenge to rebuild what should have been lasting infrastructure. It starts by commissioning the services of Built Environment Professionals who are able to deliver quality services that provide long term value solutions to lasting infrastructure now. We need to get more ‘bang for our buck’ especially at a time that our economy has flat-lined into what some would like to call a technical recession. Spending responsibly will enable more infrastructure delivery at a

time that the need for functional and lasting infrastructure grows daily.” In conclusion Campbell believes that, “We desperately need to focus on the role infrastructure investment plays in stimulating our economy by not only spending more money but spending it right.” 

CESA CEO, Chris Campbell.

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PROPERTY

We are living in a connected society where most people have access to smart mobile devices. Having quick access to information has become an extension of our existence. We have begun to see internet access, among other things, becoming cheaper and far more accessible than ever before. Technology is spawning autonomous vehicles; processes and we are even seeing a rise in Artificial Intelligence (AI) in every day devices. T his is the Fourth Industrial Revolution (4IR). According to Alan Knott-Craig, if businesses don’t embrace this disruption, they will not survive. Former Mxit CEO and founder of non-profit organisation Project Isizwe Alan Knott-Craig kicked off the revolutionary TshWiFi concept in 2013 and since then more than two million people have connected to the internet through 90 million logged sessions over 803 Free Internet Zones (FIZs) in Tshwane. Knott-Craig spoke about the changing internet and where it will be in the next five years. According to Alan, the first wave of the internet was virtual and people orientated. Google, Facebook, Twitter, eBay all exist on the internet without touching the real world. The second wave will mash the virtual and physical world and will connect both people and machines-the Fourth Industrial Revolution. Knott-Craig joined an impressive list of speakers at the 22 nd South African Council of Shopping Centres (SACSC) Annual Congress at the Durban ICC in KwaZulu-Natal from 17 to 19 October 2018. According to him, it is almost as if the Fourth Industrial Revolution was designed for us in South Africa. “It allows us to deal with divisive issues, like race and geography, and helps ensure the economy prospers and we have a brighter future. It’s happening. There’s nothing we can do about it. We have a decision to make: do we want to be washed over by the wave, or do we want to build a surfboard, and ride it?”, he states. South Africa, Africa and the rest of the world is currently in the middle of the Fourth Industrial Revolution. The 4IR will change SA in the following ways: FOURTH INDUSTRIAL REVOLUTION UPON US

Amanda Stops, Chief Executive Officer for the South African Council of Shopping Centres said that the 22 nd SACSC Annual Congress is one to look forward to. “In a world where the game is changing, our speakers gave insight on tools

Alan Knott-Craig.

to equip us as the game changes. This year we celebrated ‘Game Changers: ‘Changing the Game’ as our theme and aimed to provide lots of food for thought on how the industry can succeed in this fast paced every changing world.” Knott-Craig joined a host of other speakers such Polo Leteka, Gil Oved, Lebo Gunguluza, Vusi Thembekwayo and Vinny Lingham of Dragons’ Den South Africa fame addressed delegates at the Business Lunch. Other speakers included Jeremy Gardiner, leading economist and a seasoned SACSC Congress speaker who put a spotlight on current affairs, economics and investment markets as well as the state of consumer finances and debt levels; inflation rate; interest rates and the exchange rate. “It allows us to deal with divisive issues, like race and geography, and helps ensure the economy prospers and we have a brighter future. It’s happening. There’s nothing we can do about it.” UBER’s Shavaye Govender, head of Strategic Partnerships & Uber for Business for sub-Saharan Africa spoke on the current trends in retail transportation which include the history of Uber and the drivers of exponential growth, current mobility trends in the retail industry and how the vision of Uber fits into the lifestyle of shoppers. Zak Venter, the founder of the influential South African brand Sergeant Pepper Clothing Company spoke on the story-telling of brands. According to Venter, every brand has an authentic story to tell, the best brands find a unique way to capture an aspect of their customers’ humanity and reflects this back to them through honest, authentic, engaging communication and brand narrative. He shared his start-up story and unique ability to inspire a movement through authentic storytelling in the digital age. 

• Less friction – more productivity • Lower marginal costs – deflation • More transparency – better behaviour • Speedier economic growth – more jobs • Better politics – better presidents • Safer cities – safer citizens • Better classrooms – better educations

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REAPING BENEFITS OF CONSISTENCY South Africa’s top performing SA REIT Fairvest Property Holdings Limited (“Fairvest”) recently announced solid results for the year to 30 June 2018, with annual distributions increasing by 9,91% to 20 150 cents per share. Chief Executive Officer, Darren Wilder said: “Fairvest continues to deliver sector beating growth in distributions, while advancing the portfolio and improving the quality of the underlying properties at the same time. Annualised like-for-like net property income growth of 11,7% points to the quality of earnings, as well as healthy escalations in our portfolio.”

confident that it should achieve distribution growth of between 8% and 10% for the 2019 financial year. Wilder said, “the defensive nature of our portfolio is evident from the latest SAPOA retail trends report, which indicates that small regional centres have been recording positive growth in trading density for most of 2018, despite the decreasing trend in trading densities across the aggregate of South African shopping centres. Accessibility, convenience and daily necessities continue to attract customers to our centres throughout economic cycles. We are a hands-on team on will continue to focus on excellence in property basics – maintaining strong property fundamentals and maximising value creation. With a low-risk tenant base our portfolio remains well positioned to continue to achieve strong sustainable property growth”. 

F airvest continues to create significant shareholder value. Its total return to shareholders over one, three, five and ten years, ranks the company amongst the top three REITs in each of those periods. Fairvest has over the past year produced an annual return to shareholders of 17,9%, making it the top performing REIT for the 12 months. Fairvest maintains a unique focus on retail assets weighted toward non- metropolitan and rural shopping centres, as well as convenience and community shopping centres servicing the lower income market, in high-growth nodes, close to commuter networks. Wilder said that this strategic focus has remained consistent for several years and, together with the quality of the portfolio, has contributed to the healthy outperformance over time. The Fairvest property portfolio consists of 44 properties, with 237 965 m² of lettable area and valued at R2,99-billion. Portfolio growth The property portfolio increased by 35,5% from R2,20-billion at 30 June 2017 to R2,99-billion. Fairvest raised R422,4-million of new equity during the year, which, together with existing debt facilities, was utilised to fund acquisitions of R579,7-million. Fairvest acquired, among others, a 50% stake in Bara Precinct in Gauteng and entered a strategic relationship with Abland to develop South View Shopping Centre in Soshanguve, Gauteng. This recently completed, 7 620 m² shopping centre, is anchored by Shoprite. Capital enhancement projects at existing properties during the year included a Shoprite extension and redevelopment at Macassar Shopping Centre, as well as completion of phase one of the redevelopment at Middestad Mall. The historic portfolio increased by 7,4% from the prior year. Asset quality continues to improve, with the average value per property increasing by 26,3% to R67,8-million and the average value per square meter by 13,9% to R12 552/m².

Distribution growth Revenue increased by 22,1% to

R404,3-million, due to income growth in the portfolio, as well as acquisitions during the period. Net profit from property operations increased by 26,4% to R264,7-million, while corporate administration expenses increased by 29,1% to R25-million. Distributable earnings increased by 29,9% to R186,9-million. A strong focus on cost containment and efficient recoveries of municipal charges, improved the property expense ratio (net of utility recoveries) to 13%, compared to

15,5% for the previous financial year. Certain municipal expenses provided for in the previous financial years that were lower than anticipated, also contributed to the large improvement. Gross cost to income ratio reduced from 37,6% to 36,4%. Gross rentals across the portfolio trended upwards, with a 7,9% increase in the weighted average rental to R112,50/m² at 30 June 2018 compared to R103,99/m² at 30 June 2017. The weighted average contractual escalation for the portfolio remained unchanged at 7,4%. The company declared a final dividend of 10,344 cents per share for the six months ended 30 June 2018, up 10,28%. This brings the total combined dividend for the year to 20.150 cents per share, a 9,91% increase from the previous year and within the issued guidance of 9% to 10%. Prospects Fairvest said that it expects lacklustre economic conditions to continue and to potentially have a negative impact on the trading performance of its tenants. However, despite these headwinds, the company is

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PROPERTY

PROCUREMENT-READY SMALL BUSINESSES Eight small businesses will profit from strategic development as part of Attacq’s high-impact enterprise development initiative delivered by Property Point, a Growthpoint Properties initiative. A ll eight SMMEs, six based in Gauteng and two in the Western Cape, provide procurement opportunities both within Attacq and beyond.” Shawn Theunissen, Head of Corporate Social Responsibility at Growthpoint Properties and Founder of Property Point, explains, “Entrepreneurs hold the keys to meaningful job creation and inclusive economic growth. Attacq’s commitment to providing quality services to the property industry as part of small enterprise development for the overall business supply chain is most commendable.” with public sector partners such as the Department of Small Business Development (DSBD), to drive enterprise and supplier development forward.  The eight businesses 1. Azzaro Quantity Surveyors, headed by entrepreneur Sandi Mbutuma

services to the property industry such as quantity surveying, paving, maintenance and repairs, fire protection, environmental and safety consulting, waste management, aluminium and glass, and advertising. These are services that Attacq needs for its business. Property Point will support the accelerated growth, compliance and procurement-readiness of the small businesses, helping them become sustainable concerns with the potential to access Attacq’s supply chain, but also access market linkages across the entire property sector. Danny Vermeulen, Empowerment Specialist at Attacq, says, “We are committed to integrating SMMEs into our supply chain. We know how difficult it is to grow a successful business and that having the right partners is essential on this journey. Through Property Point’s enterprise development programme, we support small businesses with the tools and know-how necessary to accelerate their growth so they are better positioned to access the

2. ABV Construction, headed by entrepreneur Lehlogonolo Brinny Mphogo 3. Shaba & Ramplin, headed by entrepreneur Vere Shaba

Property Point’s intake for Attacq builds on a successful three-year relationship that leverages Attacq’s commitment to growing competitive small businesses and the deep- rooted success Property Point has achieved in doing this and unlocking supply chain opportunities for entrepreneurs in Gauteng, KwaZulu-Natal and the Western Cape. The award-winning Property Point programme was launched by Growthpoint Properties in 2008, and this year represents a decade of its success in developing sustainable small businesses. Over the past 10 years, it has changed the small business landscape in the property sector. It has facilitated market opportunities worth R1,14-billion for the 168 SMEs that have taken part in its two-year enterprise and supplier development programmes. It has also created more than 2 405 full-time jobs. Its SMEs report an average 44% growth in revenue. Besides private sector partners like Attacq, Property Point also works

4. Nsovo Environmental Consulting, headed by entrepreneur Munyadzi Rikhotso

5. Manhove Property Solutions, headed by entrepreneur Rachel Mohlamonyane 6. Mickardi Aluminum, headed by entrepreneur Melanie Naidoo 7. LASAKA Group, headed by entrepreneur Laaigah Sasman 8. Taste My Waffle, headed by entrepreneur Jesse Yende

Eight small businesses make up the latest Property Point intake for Attacq. Front, centre left: Shawn Theunissen, Head of Corporate Social Responsibility at

Growthpoint Properties and Founder of Property Point and front, centre right: Danny Vermeulen, Empowerment Specialist at Attacq.

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ENVIRONMENT & SUSTAINABILITY

A CORE VALUE Construction World asked Candice Manning, AECOM’s Practice Area Lead, Sustainability about sustainability and green building in the global, but specifically the South African context.

Candice Manning, AECOM’s Practice Area Lead, Sustainability.

How do you define ‘sustainability’ in the construction world? Sustainability is the preservation of natural, social and economic resources which is done through innovative construction methods and conscious decisions throughout the lifecycle of designing, constructing and operating a project.

energy, our commitment to sustainability drives innovation, resiliency, reduces risk and provides attractive project life cycle returns on investment”. How has sustainability in the South African built environment been received? A positive return on investment encourages and reinforces the need for sustainability. It has thus far been a challenge for some and an absolute must for others. Generally it has been received positively. Some say that green building certification is a mere ‘tick box’ and has little to do with true sustainable construction. How do you respond to this? A green building certification scheme is not merely a tick box tool but it is up to the client and project team to ensure the best sustainable technologies and designs are adopted and implemented, not just the bare minimum required for a green building certification. These tools promote better design, construction and operation and ensure best practices are adopted. The South African Green Star tool has influenced much change in the industry, and it is time for a new version to be released to challenge the market again. What advances in the context of construction, consulting and planning in terms of sustainability have there been in recent years? There has been a remarkable interest and shift towards achieving net zero status for new and existing developments. An integrated approach to achieving these targets is required in the planning process. The entire project team must work together to achieve these stringent requirements. Our Building Information Modelling (BIM) has advanced drastically in the last few years. We have a strong BIM team that can analyse a project’s carbon emissions associated with the energy consumption, thermal comfort of the occupants as well as daylight modelling. We can interrogate the design of projects until they perform as required. 6D BIM is and incorporated into our offering, whereby performance/value engineering and return on investment is offered to our clients. How are these advances incorporated into your offering?

We are in the process of high level implementation of 7D modelling in the healthcare sector. Has AECOM conducted independent research into is offerings for sustainable building? What research has been conducted? AECOM continuously keeps up to date with latest technologies, methods, approaches, and materials. When do you think the perception that sustainable construction is a nice-to-have will be changed in South Africa? When we provide our clients with sustainable development solutions which has a strong cost benefit analysis and positive return on investment, it is no longer just a nice-to-have but rather a sound business decision that makes economic sense. The AECOM Sustainability report describes 2017 as one of the most costly years, in both lives lost and property destroyed, that our world has experienced in decades. Resilience is an essential step forward on the path to sustainability and sustainable development is no longer a nice to have. It is imperative that we adopt these principles now. I believe legislation and accountability needs to be a key driver in ensuring sustainable principles are incorporated in all projects. Corporate companies such as Absa have already realised the risk of not addressing sustainability in their new and existing building stock and have shown commitment to certify new and existing projects in line with best practice sustainability initiatives. How has sustainable construction been received in the African countries where AECOM has a presence? Our design, whether in South Africa or other African countries, is in line with our core value of sustainability. We educate project teams based in African countries and we work with local materials and practices to form sustainable solutions. We have just been part of a successful project in Mozambique using sustainable construction practices which achieved the first LEED rating in the country. 

How does South Africa fare in the ‘sustainable construction’ stakes – compared to the rest of the world? In some developed countries, the

construction materials market is possibly more advanced with a greater range of available materials that have considered and developed sustainability certifications. The South African construction industry has developed positively in the last few years, but there is still a lot of room for growth and needs to commit to more sustainable technology and practices. How does AECOM include sustainability in its offering – what do you offer a developer wanting to build a sustainable project? Sustainable Development practice is integrated into all disciplines. There is sustainability consciousness in the design mind set of AECOM professionals. As Sustainability Consultants, we will work with the client to understand exactly what they want to achieve and establish a plan to achieve the end goals. We design efficient sustainable building services, and manage the process up until Green Star certification through the Green Building Council of South Africa. Our Green Star offering includes detailed energy, daylight thermal comfort and CFD modelling. “Whether we’re reducing greenhouse gas emissions, developing new ways to conserve water or promoting renewable

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