Construction World October 2018

COVERING THE WORLD OF CONSTRUCTION

OCTOBER 2018

WORLD

CR O WN

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

Keeping standards high in SA’s READYMIX

HOW TO SCHEDULE A PRECAST PLANT PROJECT

HIGHRISE CONSTRUCTION TAKES ON NEW DIMENSIONS

FOCUS: ROADS & BRIDGES AND READYMIX

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CONTENTS

04 Creating legacies All the winners in this year’s CESA Aon Engineering Excellence Awards.

18 Two developments in Cape Town Abland is currently busy with two major projects in the Mother City.

20 Shedding light on Durban’s emerging aerotropolis This development will spearhead significant economic and social transformation.

06 Focusing on women in construction The cidb recently held a Women’s Breakfast in Pretoria.

08 “Impossible is just an opinion” Construction World attended the recent ASAQS Conference.

22 Cape Flats 3 bulk sewer – Phase 2 wins award AECOM’s ground-breaking project bagged a CESA Award.

11 Career advice on entering STEM fields Science, technology, engineering and mathematics skills are in short supply.

24 Highrise construction takes on new dimensions The way skyscrapers are built is being revolutionised by Doka.

26 Major engineering milestone in Lesotho The recently constructed Metolong Dam has overflowed for the first time. 36 Strategic road upgrade JG Afrika is overseeing the upgrade of a stretch of the N1 in the Western Cape. 40 Self-compacting concrete’s reliable partner CHRYSO’s product enhancements give superior strengths and finishes.

14 Africa’s next top property trends Major trends that are likely to shape Africa’s property markets.

REGULARS

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Marketplace

Property

Projects & Contracts

ON THE COVER

Equipment

SARMA-accredited readymix suppliers, such as AfriSam, have the specialist technical expertise and production capabilities to provide contractors with quality concrete and consistency of supply. Read the story on pages 16 and 17.

Products & Services

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CONSTRUCTION WORLD OCTOBER 2018

COMMENT Do you think that the Greek austerity of the last few years is far removed from the South African situation? It is actually not and the similarities are quite uncanny and alarming.

An abandoned construction site. The South African construction industry has been on a downward trajectory for 55 months. The local civils industry is in especially tough terrain.

On 23 April 2010, the prime minister of Greece, George Papandre- ou announced that the country would require billions of euros for it not to collapse completely, a result of many years of failing to effectively govern the Greek state. Eight years later, on 20 August 2018, Greece graduated from its third bailout. In these eight years, ordinary Greeks faced austerity and paid for the economic ‘crimes’ of their leaders. It can be said, as Richard Poplak from the Daily Maverick put it, that the country had been “colonised by an actuary’s spreadsheet”. In spite of the fact that the Eurozone is our biggest trading partner, South Africa, which is geographically far removed from Greece, did not really take notice. Instead, rather than heeding the alarm bells the Greek economic crisis set off, our previous president chose to wholly mess up Transnet, Eskom and most state-owned enterprises by enriching a limited few. When his term came to an end, the damage had already been done. Sadly, his successor is not faring much better. For a while the country was caught up in the euphoria of the election of Cyril Ramaphosa as president and for a quarter, there was positive growth. But we swiftly swung out of Ramaphoria on the back of a first quarter contraction of 2,2% and then a 0,7% retraction which put the country in a technical recession. We realise now that it is going to take more than sentiment to get us out of this mess. First to go was the rand. Up till recently it had been the darling currency of the developing world, but has, at the time of writing, lost almost 4% of its value on the back of the implosion of the Turkish lira. Recep Erdoğan, the Turkish president, fuelled Turkish growth by borrowing in American dollars. As the interest rates rose in the USA and the lira dropped in value, investors became increasingly worried that the country would not be able to repay them and lost interest in emerging currencies. Sure, the previous president cannot be blamed for this, but his actions

over his terms left the country devoid of any buffer. These include a year-on-year retracting economy and a youth unemployment rate of 52,5% (not to mention the current unem- ployment rate of 27,2% (Q2 2018)). The ruling party is not helping the situation. We have the land expropriation without compensation policy that is scaring off many potential investors, the inability to realise the uncertainty created by not finalising the Mining Charter and the inability to effectively root out corruption. The latter has effectively stopped the private sector, which is sitting on massive cash deposits, from injecting the economy with a much needed impetus. Instead of steadying the fundamentals, Cyril Ramaphosa is going around the world collecting promises of investment from the likes of China and Britain while being mum on the actual terms. This is where the similarity with the Greek situation comes in: we may end up in a situation where money is so expensive to repay, that we end up ‘surrendering’ our sovereignty. The inability to govern effectively, cannot be corrected by plugging holes – these always come with hefty price tags. The construction industry What does this mean for the construction industry? Yes, it has experienced a downward trend for the past 55 months, but this is still no excuse for government not to invest in infrastructure. It is a case of simple economics: the construction sector has the potential to be the country’s biggest employer. Instead, tenders are cancelled, payments are made to contractors late, and there is rampant corruption under the guise of transforma- tion. The result? A civils industry that is battling for survival.

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@ConstWorldSA

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CONSTRUCTION WORLD OCTOBER 2018

T his year close to 50 submissions were received and in celebra- tion of Nelson Mandela’s Centenary year CESA expanded the Award’s categories to include ‘The Lifetime Industry Achievement Award’, a discretionary award to recognise an individual who has contributed significantly to the development and promotion of the Consulting Engineering Industry in South Africa during their lifetime. “It was befitting that we included this new category in the centenary year of one of the greatest legends of all time, Nelson Mandela. Engineers create legacies, each time you change the land- scape you change history. Each time you plan, design, build, maintain and rehabilitate, you are creating a legacy for the next generation.” Engineering impacts directly on people’s lives making clean water possible, providing reliable energy, safe transport and fast communication,” said Chris Campbell, CESA CEO. Aon South Africa Business Unit Manager, Meggyn Marot stated, “The gravity and everlasting effects of an engineer’s work on a society should never be overlooked. As challenging as the environment may be, you have achieved success by being out there, being on the forefront, and having a clear plan about what the eventualities might be. We believe that risk should also be embraced for the opportunity that it presents. As winners of the 2018 CESA awards, you have been a part of making history, and sewing your craft into the fabric of the societies you serve. We congratulate each and every one of you for the strides and accomplishments you have made. We are immensely proud to be sponsoring this prestigious event, and of our ongoing association with CESA and its members.” Awards were handed out in the following categories: Lifetime Industry Achievement Award; Young Engineer of the Year; Engineer- ing Excellence for projects with a value of less than R50-million; projects between R50-million and R250-million and for projects with a value of over R250-million; Best International Project; Visionary Client of the Year; Young Company of the Year; Mentor of the Year; Business Excellence; Mentoring Company of the Year; Publisher of the Year; Job Shadow Initiative; and Branch of the Year. And the winners were The first ever CESA Lifetime Industry Achievement Award was presented posthumously to Ivor Evans, one of CESA’s past CREATING LEGACIES The who’s who of the Built Environment, hosted by Consulting Engineers South Africa (CESA) and sponsored by Aon South Africa, celebrated excellence in engineering at the 2018 CESA Aon Engineering Excellence Awards – creating legacies and honouring legends.

presidents who had served the industry with enthusiasm and passion his entire career. In order to promote the Consulting Engineering industry to young professionals, CESA recognises the contribution young engineers make to the industry and to the future of the profession. The winner is afforded an opportunity to attend the International Federation of Consulting Engineers (FIDIC) Infrastructure Conference. Airports Company South Africa (ACSA) sponsored the Young Engineer of the Year Award. The winner in the category of Young Engineer of the Year is Shamiso Kumbirai from Aurecon with Ntseuoa Motsieloa from Bosch Projects receiving a commendation. The category for Engineering Excellence with a value greater than R250-million was won by AECOM for the Construction of the Cape Flats 3 Bulk Sewer – Phase 2 with HHO Consulting receiving a commendation for the Upgrade of the N11 Section 10 from Middel- burg to Loskop Dam. The category for Engineering Excellence with a value between R50-million and R250-million was won by Aurecon for the Sol Plaatje University Library and Student Resource Centre. Commendations were awarded to Knight Piésold for the Rehabilitation of Main Road between Atlantic Road, Muizenberg and Clovelly Road, Clovelly – Phase 3; and to Royal HaskoningDHV for the Grayston Pedestrian and Cycle Bridge. The category for Engineering Excellence with a value less than R50-million, was won by Hatch Africa for the Tugela River Pedestri- an Bridge with Naidu Consulting receiving a commendation for the Widening of the Tongati River Bridge. In the category of Best International Project, sponsored by the Built Environment Professionals Export Council (BEPEC), SMEC South Africa was announced as winner for the Sydney Metro Cable Stayed Bridge with Knight Piésold receiving a commendation for the Von Bach Dam Asphaltic Seal Replacement. Knight Piésold won the Business Excellence category with BVi Consulting Engineers receiving a commendation. Naidu Consulting won the Mentoring Company of the Year, sponsored by Bosch Holdings with Knight Piésold receiving a commendation. Infraconsult Engineering was recognised as Small Company of the Year. In an effort to promote mentorship of young engineers CESA recognises the contribution Mentors make to the industry and the future of the profession. Graham Jennings from Knight Piésold is the Mentor of the Year. SANRAL is the Visionary Client of the Year. In recognition of the role that the media plays in the industry, Crown Publications received recognition for Publishing Excellence: Trade Publications and Tiso Blackstar publishers of Business Day received recognition for Publishing Excellence: Daily Newspapers. Knight Piésold was announced as the winner of the CESA Job Shadow Initiative with UWP Consulting as the 1 st runner up and Hatch as 2 nd runner up. CESA's Limpopo Branch was named winner of the Branch of the Year Award. 

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FOCUSING ON WOMEN IN CONSTRUCTION

T he breakfast, a vital platform joining women from across the industry, provided an opportunity to start a meaningful discussion on how best government, industry and the cidb can continue to sup- port the growth of women in construction, providing them with much needed connections to ensure they are moved to the front of the line. According to the latest cidb Annual Construction Monitor Transformation, the number of women-owned contractors in cidb Grades 2 to 6 has decreased, but the number of women-owned cidb Grades 7 to 9 – medium to large – contractors has increased. Women-owned contractors amount to around 30% of all contracting enterprises on the cidb Register of Contractors. “The cidb had no figures for women-owned contractors Grades 7 to 9 in 2004 because there were hardly any. Today, they make up 24% of our members and while this is still not progress, we consider it good enough to celebrate as progress none the less. These women are the flagship of our industry and our democracy, which allows women to become who they want to be in the economy and society. However, they now also have a huge role to play in pulling up women contractors from the lower grades,” says Nonkululeko Sindane, cidb Board Chairperson. “It is important and necessary for these women to look after those who are still growing. I think we can all agree that you do not get to the top without help from others. We must support their development, share our skills, ethics, competitiveness and wisdom, and also treat them well through joint ventures and sub-contracts and of course, pay them on time.” Speaking on behalf of the Department of Public Works, Minister To celebrate Women’s’ Month, the Construction Industry Development Board (cidb) held a Women’s Breakfast at the Sheraton Hotel in Pretoria on Friday 17 August 2018. Joined by Public Works Minister Thulas Nxesi as a guest speaker, the primary agenda was developing women in the construction industry.

The Programme Director, Iman Rapetti.

Minister Thulas Nxesi and Nonkululeko Sindane.

Nxesi congratulated the cidb on the success it has achieved so far in the growing number of women contractors, but agrees that more work needs to be done in terms of training and mentoring. “Our economy is at best sluggish and, while we have narrowly missed a recession, it is in these kinds of conditions that construc- tion is hit harder than other sectors. This also plays a role in the success of women in the industry, but we cannot just throw our hands up in despair. We must make the most of what we have and use policy, regulation and advocacy to support women contractors and ensure their numbers continue to rise.” The Department of Public Works currently has programmes and policies in place to guide its procurement regulations. “The new Preferential Procurement Policy Framework Act regulations allow us to designate tenders to emerging companies and those that are more than 51% black-owned, where 30% mandato- ry subcontracting is implemented in tenders above R30-million. We have also been advised that we can designate tenders for women, allowing us to continue to support this group with the appropriate legal and policy framework,” continues Nxesi. “As client departments we have an obligation to translate legislation into procurement policies which consciously support women owned contractors”. The Minister also urged large contractors to play their part in growing women in construction through sub-contracting, thus ensur- ing the continued development of small to medium contractors. 

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BENEFITTING FROM LOCAL KNOWLEDGE Language barriers, different cultural expectations and a whole new set of engineering standards

Maintaining your standards It’s important that you invest time in the local team you put together to train them to work to your expectations. For instance, at Boulting we train all engineers we work with around the world to maintain British standards, such as electrical installation standard BS 7671, as well as various health and safety standards. Not only does this make sure your facility is built to the highest standard, and in keeping with any other facility you have around the world, you’re also building a base of local support for the future. No matter how well the initial commission, development and deployment goes, you can’t predict what may go wrong in the future. Should something break down or require servicing further down the line you know there is reliable, local support. For example, we hold familiarisation training with our client’s competent engineers, so that they fully understand the functionality and any unique features or requirements of our equipment installed. Giving back to the global community Investing time to train engineers in all these different aspects of working on a UK-led project builds the skills base in that region, contributing to closing the international engineering skills gap. Knowledge sharing is vital to proliferate best practice and advanced learning, particularly in developing parts of the world that are growing their standing on the international engineering stage. At Boulting, one of our health and safety advisors runs a course for competent engineers that grants them a Boulting certification in best workplace safety practice. This is something that these individuals can use to gain further employment on higher profile projects, supporting local employment and the regional economy. According to Odi.org, sub-Saharan Africa’s manufacturing sector has grown over the last decade, seeing increased production, employment, trade and foreign direct investment (FDI). Much of this FDI is from developed countries, such as the UK and America, which see the potential in the African market. In regions like this, being able to prove that they can work to UK standards will help engineers find more work. Something that both benefits the region and the international manufacturing sector. So, as you can see, finding local engineers can be a massive benefit to your international projects as well as building an engineer- ing presence you can rely on, where ever you are in the world. 

M - ing standards, cultural expectations and languages. However, if you engage with local engineers as early as possible and work closely with them to share knowledge you’ll find that things run a lot smoother. Knowledge sharing The most obvious benefit from employing local engineers is gaining their insight and knowledge. Not only can they help you navigate cultur- al expectations of local organisations and potential future employees at the site, they can also support you in selecting the right local suppliers. In addition, they will obviously speak the local language. This is a great help as it means you don’t have to staff your own teams with an array of translators. Local staff can also support you in translat- ing necessary forms or induction documents. – managing an international project can be daunting. Here, Dave Friar, operations director at engineering solutions provider, Boulting Ltd explains why working closely with local engineers when managing construction and commissioning of international facilities can lessen the headache.

ICON OF SA ENGINEERING PASSES AWAY AT 97

S outh Africa’s ‘grating man’ Andrew Men- tis, founder of steel floor grating special- ist Andrew Mentis, passed away on 17 June 2018 in Johannesburg at the age of 97. The son of a Greek immigrant, Mentis grew up in Johannesburg in a house behind his father’s general dealer shop in Kerk Street. He became an apprentice fitter and turner in 1938, having completed his Advanced Tech- nical Certificate at Witwatersrand Technical College, taking his first job at SCAWMetals. He started his first business after the war at age 25, partnering with his brother-in- law to produce equipment that varied from vegetable-oil expellers, sweet manufactur-

ing machinery and bakery equipment, to gas producers, lawnmower components and brass window and door fittings. His big break came in 1952 when the US’s Kellogg Corporation needed to source a suitable floor grating for the mammoth Sasol contract they were managing in the Vaal triangle. The product was not available locally, and the grating imported from Europe was too light for this application. In the late 1950s, he designed and patent- ed ‘Rectagrid’, a completely new type of grating – along with a complete manu- facturing plant to allow mass production on a cost-effective basis. So successful

was this facility that a similar plant was later produced and exported to the United Kingdom. This was one of several Andrew Mentis’ exports that earned the company the prestigious State President’s Award for Export Achievement. His contribution to the engineering industry was recognised by his position as a Fellow of the Institute of Engineering Tech- nology, the Institute of Production Engineers and the SA Institute of Industrial Engineers. He was a Life Member of the SA Society for Professional Engineers, as well as a member of the SA Institute of Mechanical Engineers and the Engineers Association of SA. 

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“IMPOSSIBLE IS JUST AN OPINION”

The Annual Association of South African Quantity Surveyors (ASAQS) Conference, which took place on 2 August, is a one day conference with speakers whose

• Transforming the economy to make it more inclusive • Ensuring integrity in governance • Deepening domestic partnerships • The improvement of global competitiveness “In the end,” she says, “agility and adaptabil- ity is how one arrives at sustainability.” This is especially vital as FDI into infrastructure has shrunk, the number of new projects has declined and there has been an increase in stalled or failed projects. “PPPs and conces- sions have largely ground to a halt and the failures in good governance in our metros have incapacitated service delivery and an important revenue life line for professionals,” she continues. A long downward trend Craig Lemboe, a senior economist at the Bureau for Economic Research (who compiles the BER Consumer Confidence Index), gave a sobering presentation of the status of the construction industry: Since December 2013 it has shown a downward trend. He says that the only way the country’s construction industry (and industries in general) will return to growth, will be through the return of private investment, improved political sentiment, rebalancing the approach to transformation, ensuring that growth is labour-intensive, rooting out corruption and obviously through improving the education system, which he says has been the ruling party’s greatest failure. In the interim though The moral of the story is that turbulence has become the norm and only one characteris- tic leads to success in such a challenging context … grit. It is up to the individuals and companies that make up the built environ- ment to determine how this turbulent time will be survived so that when the tide turns they can take advantage of more positive environment. Change, both good and bad, is happening rapidly and the industry has to be resilient. Agility and adaptability is the only way to achieve a sustainable model – for a company, a profession and an industry.

messages are not only pertinent to the QS profession, but to the construction industry as a whole. This year’s speakers ranged from professional adventurer Peter von Kets to strategic specialist Dr Andrew Brough to Oscar von Memerty who inspired with his message of success against the gravest of odds. Construction World attended and filed this report.

T he South African construction industry is in largely negative terrain – especially the civils industry. This formed the basis of almost all of presentations at the ASAQS Annual Conference. As this uncertainty is a given, the underlying message of the confer- ence was that the construction industry (and Yunus Bayat, the recently elected President of the ASAQS started off the Conference by stating that the aim of the ASAQS is not only the preservation of the profession, but also to enhance it. “It will be preserved by upholding professional ethics, integrity and maintaining high standards,” he said. “In the current depressed times it is inter- esting to note that construction has the high- est potential for growth,” said Bayat. “Keeping up with the times by embracing technological advancements such as BIM is one example of how the QS profession can show its agility." Larry Feinberg, the Executive Director of the ASAQS, has been instrumental in the marketing of the QS profession to stakeholders. “Members of the ASAQS have been sensing forward movement. Grit, passion and optimism go hand in hand with progress,” said Feinberg. A strategic plan for the QS profession has been laid out so progress is measurable and sustained. “The ASAQS has been instrumental in the advocacy and marketing of the profession so it is represented as widely as possible. The 93% collection rate of membership fees and the increased number of applications for positions on the executive committee, are indicative of this traction. Clients rely on a QS for them to stay competitive in a cut throat industry,” Feinberg said. QSs) should build on this knowledge. Embracing advancements

Professional adventurer Peter von Kets equated his experiences (crossing the Atlan- tic in a two-man row boat, for example) to how one would conduct business in a world where turbulence has become the norm. “One characteristic leads to success – grit – no matter what you are faced with on your journey." A quote from Mohammed Ali, “the impossible is just as opinion” is something that Von Ketz truly believes. A new currency Context is the new currency is what Lynette Ntuli, CEO of Innate Investment Solution defined the status quo to be. The volatile context, where the rand can nosedive in a matter of hours, is something that the coun- try (and industry) has become accustomed to. “We have swung into ‘Ramaphoria’ and quickly swung out of it – with the realisa- tion that it is going to take more than mere sentiment to steady this ship,” she said. “We are living in a vibrant and volatile context – and this volatility is something that we have become accustomed to.” Ntuli said that the sad reality is that everything has now become political: water, education, business, diversity, transforma- tion, healthcare, even safety. The related infrastructure for these is no longer a basic human need, but an expression of power. “Things are happening rapidly and we have to be resilient and agile in this context if a business is to survive.” However, what does this mean for the built environment? “For example, only 13 of 283 municipalities got a clean audit this year, so by and large we can ask if we have lost grip,” Ntuli said. She did offer a few ways the construction industry (and country as a whole) can get it back:

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CONSTRUCTION WORLD OCTOBER 2018

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Purple cow Dr Andrew Brough, who practices as an international leadership and organisational consultant and chartered marketer said that the only way for companies to ride out the current wave and successfully navigate the slippery slopes, is for them to look inward and determine what the differentiating factor of their company is. “If your competitive advan- tage is price only, you are following a strategy that is not sustainable,” he says. The overrid- ing message of his talk was the concept of the ‘purple cow’ – a phrase coined by Seth Godin to denote standing out from the crowd. Now is the time for the companies within the industry to define what makes them stand out, what makes them intrinsically different. Closer to home Dr Deen Letchmiah, founding director of a large QS practice and the current President of the South African Council for the Quantity Surveying Profession (SACQSP), spoke about specifics. “The current role of a QS is that of a ‘number cruncher’, a counter of bricks, and estimator, a profession perceived as old hat and boring. The future role of a QS will be that of a cost manager, someone who manages value. The QS of the future will be a people person, dynamic, innovative and a facilitator." He said that Government depart- ments have not gained value for money from construction projects because of (i) Underspending and poor management of funds – 8 000 full-time job opportu- nities are lost for every R1-billion that goes unspent, (ii) The awarding of contracts to the lowest bid without considering the quality, and

(iii) Inadequate supply chain management procurement processes and controls in project delivery. “Research indicates a need for best practice methodology for delivery of public infra- structure. However, there has been a lack of control mechanisms and abuse due to fraud and corruption,” he says. “National Treasury is attempting to address these challenges with the Standard for Procurement and Delivery Management.” He also touched on the advantages of BIM. “5D BIM can extract measurement for quick calculations. This will enable a QS to focus of higher value-adding work for anal- ysis and interpretation. The BIM model can be shared directly between parties which means the QS gets involved earlier and can give immediate feedback using BIM Revi- sioning. This will lead to strategic municipal asset management, value management, life- cycle costing and benchmarking,” he said. Vaughan Harris, founder of the BIM Institute, discussed the advantages of BIM further in this presentation, ‘BIM – A moving glacier’ during which a panel of experts also gave their input. Embracing BIM is one way – as Yunus Bayat mentioned at the outset of the Conference – the profession can embrace advances to make it relevant and vital in the future of development. Even closer Dr Stephan Ramabodu, immediate past President of the ASAQS, discussed the ‘Generalised Anxiety Syndrome experienced by Quantity Surveyors in the work environ- ment’. These results, based on a survey with 154 respondents, found that the factors the affect business confidence are: political instability, taxes, interest rates, inflation, economy, competition and fiscal policies. These factors lead to business stress – in various forms of severity. In the current uncertain and challenging industry, only 5,06% of surveyed Quantity Quantity companies do not discount pro- fessional fees, something another speaker pointed out as unsustainable. 

Peter van Kets: Grit – Never give up “Believe that you can achieve anything, put grit to it, and you will achieve anything.” Lynette Ntuli – Traction: Get a grip! “We can no longer play to the same rule of tradition, formality and risk.” Craig Lemboe – Peaks and valleys: economic trends “Improved sentiment leads to improved investment. What can you do to improve sentiment?” Dr Andrew Brough – Navigating the slopes: strategy for new business “The only way to survive is not to drive down you fees.” Uwe Putlitz – JBCC Going forward “JBCC documentation 2018 … shorter … simpler … stronger” Oscar von Memerty – Reaching the summit against all odds “What you see as your most limiting factor can become your biggest advantage.” Vaughan Harris – BIM: A moving glacier “As a profession we have to build what we need on the BIM foundation.” Dr Calayede Davey – Lean Construction: a business case “Find and eliminate waste, increase the flow, seek out continuous improvement.” Dr Stephan Ramabodu – QS Practices: Stressed? “We need tp start taking stress seriously and start taking care of ourselves.” Dr Deen Letchmiah – Gaining ground: the future is exciting “The future for the QS is not extinction, it is filled with excitement, as long as we move with the time.”

Larry Feinberg, Executive Director of the ASAQS: “Clients rely on a QS to stay competitive.”

Yunus Bayat, President of the ASAQS: “The construction industry has the largest potential for job creation”.

Vaughan Harris, founder of the BIM Institute: “BIM is vital for the QS profession to stay relevant.”

Lynette Ntuli: “Only by combining agility with adaptability

do you achieve sustainability."

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CAREER ADVICE ON ENTERING STEM FIELDS Science, technology, engineering and mathematics (STEM) skills are in short supply globally. However, in South Africa the skills shortage is compounded

them and that they will be passionate about in their work lives. “What I love most about what we do is being able to imagine and conceptu- alise something – and then see it come to life.” Every experience moulds you “From my experience I can say that it is important to not negate any opportunities to gain experiences, or how important that experi- ence will be to you,” says Frankie A'Bear, Civil Engineer, Transport & Infrastructure, WSP in Africa. “Even if it’s a project or an organisation that you’re involved with while in school or university – because even these provide you with exposure to basic skills in project and people management, for example. “Engineering is my personal passion and I would encourage all young people to study and enter the engineering field. But, even if you don’t, it’s important for young people to use the time while they are studying towards their chosen qualification to build themselves into a multifaceted person,” continues A'Bear. “This is especially true at university, as there are many resources available and it is so important for young people to not allow them- selves to be pigeon-holed by only focusing on finishing their qualifica- tion. Rather, they should look to use the resources around them to the best of their ability, possibly visit other faculties and sit in on some of the public lectures and discussions, because they will be surprised by the lines of similarity between the various disciplines,” suggests Nhlapo. Collaborate with others to grow your career Karen King, Senior Associate, Environment & Energy, WSP in Africa, advocates that for students who want to grow their career in any STEM field they should also look out for opportunities to job shadow and intern. “It’s important to do what interests you – and to leverage every opportunity to gain as much field experience as you can. In fact, once you enter the working world, your practical experience tends to become more important than anything else as you grow in your career.” “When afforded such opportunities, it’s just as important to be conscious of the environment, to gain the most from the learning experience. And, if a mentor is not provided to you, seek advice. There are so many people around you that can mentor your way of thinking, your work ethic and that you can draw inspiration from, while there are also formal channels and mentors you can engage with on your career development,” adds Manthose. King indicates that the mentorship and professional career guidance provided at WSP is very advantageous. “For instance, WSP has had an almost 100% successful registration rate with ECSA over the last three years – and the firm offers a similar programme for candidates in the environmental science space for professional registration with the South African Council for Natural Scientific Professions. So, for anyone coming into WSP, they will receive mentorship and career guidance – and from people who have been through the process before them and know how to get to that next phase for professional registration.” “At the end of the day, if you love what you do, you’ll never stop enquiring and innovating, thereby making a difference for society and the world we live in,” concludes Manthose. 

T o put this into context, the number of registered engineers in South Africa is only about 0,04% of the population, which is a very low number when compared to more developed economies, such as the United Kingdom for instance, where the number is about 0,34% of the population. Furthermore, the Engineering Council of South Africa (ECSA) 2016/2017 Annual Report highlighted that of the 28 195 professional category registrations processed in the reporting year, only about 7% were women. These statistics demonstrate a clear gap that needs to be addressed, starting with attracting more young talent to pursue careers in these fields and that they may become more involved in designing for a sustainable future their way. WSP believes in the value of skilled people; where engineering, environmental sciences and green building skills are crucial to sup- port sustainable growth and development. The company therefore places significant focus on looking in every possible avenue to find key talent and skills that may be nurtured through mentorship and career guidance – and believes that diversity (in age, sex, culture, etc.) can add immense value to dynamisms, innovative thinking and new approach to collaboration and project work in the workplace. Looking at tackling some of the barriers to entry, WSP caught up with four inspired women in their business – two engineers, an environ- mental scientist and a sustainability consultant – on their career ad- vice for the youth and budding professionals on entering these fields. Seeing possibilities, everywhere One clear message from the panel is to not feel limited by a chosen discipline and/or qualification. Hlologelo Manthose, Sustainability Consultant, Building Services, WSP in Africa, says, “I am living proof that even if you don’t end up working in the profession that you have studied and qualified for, you can still find limitless and meaningful opportunities if you follow your passion. I studied Industrial Psychology, and I love working with people – and ensuring that people and the environment are well integrated. This led me to working in the built environment. So, my advice for young people who are looking to get into the built environ- ment, is that there really are limitless opportunities, but it’s important to be open-minded.” Jabulile Nhlapo, Mechanical Engineer, Associate, Building Services, WSP in Africa, agrees and adds that young people and students should look to pursue a career in something that interests by difficult barriers to entry, where there are insufficient numbers of high school graduates attaining the mathematics and science results needed to enter into these fields.

FROM LEFT: Karen King, Senior Associate, Environment & Energy, WSP in Africa. Frankie A'Bear, Civil Engineer, Transport & Infrastructure, WSP in Africa. Jabulile Nhlapo, Mechanical Engineer, Associate, Building Services, WSP in Africa. Hlologelo Manthose, Sustainability Consultant, Building Services, WSP in Africa.

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MARKETPLACE

GOVERNMENT’S ROLE IN CONSTRUCTION

these logistics, power, housing and water infrastructure investments would help the industry recover to 1,7% growth in 2018. Costs Consumer price Inflation in South Africa will remain within the 4-6% acceptable to the central bank, and shouldn’t be a concern for the construction industry. In fact, materials prices are seeing relatively low inflation at only 2,27%, suggesting material costs are unlikely to drive up tender prices in the near term. Having raised interest rates by 0,25% in March 2018, the South Africa Reserve Bank is not poised to boost them further this year, especially given the risk of slowing down an already faltering economy. However, recent fiscal policy movements, including the first VAT hike in 25 years, fuel tax rises and other tax increases, will drive costs upwards. Labour Construction earnings growth is slowing down, shrinking by 1,1% in the year to Q1 2018. Despite improving expectations in the wider market, activity has not yet picked up sufficiently to grow earnings, an indication of ongoing slack in the construction labour market. Demand has even weakened to the point of losing employees in the sector, a decrease of 3,4% in the year to Q1 2018. While this is a natural reaction to the lower levels of activity, it poses serious risks for the loss of valued skills, and the readiness of the industry to deliver the country’s signif- icant infrastructure needs. Kenya Economy Kenya’s economy continues on its upward swing as it recovers from the slight slowdown we saw in the last report. At 5,5% growth is forecast to be well above the SSA average in 2018 and is expected to remain strong, trend- ing at just under 6% for the medium term. Kenya is seeing massive growth in foreign investment, growing by 71% to USD672-million in 2017 in contrast to slow- ing FDI across Africa as a whole. Investors are attracted to its developed financial markets, openness to foreign capital and lower hurdles to raising financing than most African markets. Nairobi was named among the top 10 urban FDI destinations in Africa in 2018, attracting USD5,9-billion between

The successful transfer of power in the recent elections has renewed confidence in Kenyan governance and consequently, its markets. With its role as the gateway to East African business opportunities, the country’s real estate sector is booming as the middle-class expands.

T his is driving significant demand for construction across sectors, with public and private spending fuelling infrastruc- ture while business opportunities and the growing middle-class fuel commercial construction. As the market heats up, the main challenge will be finding financing as the government battles high public debt. The private sector is entering the gap left by the government, driving unprecedented levels of Foreign Direct Investment into Kenya. The South African government is still struggling with balancing reforming the economy sufficiently to renew investor confidence, and the need to maintain popular support in the run up to the 2019 election with very constrained budgets. South Africa Economy South Africa is still struggling to boost itself out of its recent slump. While recovered from the dismal growth of 2017, the 1,5% GDP growth anticipated this year is unlikely to fuel confirmed that despite confidence levels im- proving, the economy still lost momentum at the start of the year as headwinds continued for both investors and consumers. With high government debt impacting the government’s ability to invest in the economy, President Ramaphosa faces a difficult balancing act be- tween reassuring investors about government spending and rebuilding popular support for his ANC party before the 2019 elections. While the South African rand had been a significant recovery in construction demand. A contraction in GDP in Q1

through a period of significant appreciation, this year has seen a reversal with large depreciations in the currency of 8-11,5% (against the euro, dollar and pound) since the start of the year. As the rand becomes cheaper, international investment into the country will become more attractive. If Ramaphosa delivers the reforms needed to return confidence to the market, these two factors combined will create ideal condi- tions for foreign direct investment and help boost the struggling construction sector. Construction With a challenging pipeline of work to meet critical national demands, the government is facing a budget funding crisis making this pipeline look far from certain. While confidence is slowly returning to the wider market, there are still significant difficulties and private investment remains weak. In addition to this, the twin challenges of the Mining Charter and land reform will continue to impact on investor confidence in the construction sector, dampening investment levels. Land reform has long been a central campaign promise of the ANC, promising to redress the huge inequality in ownership caused by racial segregation during apartheid. Four out of the five worst performing companies on the Johannesburg Stock Exchange are involved in construction and real estate, with their shares falling by an average 75% this year to June. After construction lost output value in 2017, contracting by 0,3% in real terms,

View from Ponte Tower of the skyline of Johannesburg.

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CONSTRUCTION WORLD OCTOBER 2018

180 degree panorama of new buildings in Nairobi.

2003 and 2016 as foreign money flowed into real estate and infrastructure opportunities. The Kenyan shilling has seen significant appreciation in 2018 as foreign investment has flowed into the country spiking currency demand. However, given significant loss of value throughout 2017 this can largely be seen as a correction. Construction After the government paused spending during the election, there is now a lot of buzz in the Kenyan market as activity levels pick up. With clients and contractors starting on a huge number of schemes, we are observ- ing broad-based growth across sectors of the construction market, forecast at 8,9%

for 2018. High levels of activity in Kenyan construction across sectors will see tender prices return to pre-2017 slump levels in 2018, and accelerate rapidly from 2019. Significant government spending plans are set to make infrastructure the fastest growing construction sector over the next few years. Rail and port infrastructure will see growth with government investment focused on improving logistics. Power is also a growth sector as Kenya continues to harness its significant renewables capacity – particularly geothermal. In the meantime, the rewards of recent investments in boosting logistics and facilitat- ing economic growth are blossoming. This can be seen in the form of a growing middle class

city as opportunities grow. The government has embarked on a social housing programme to meet skyrocketing demand. As activity in the market heats up, projects are running headlong into the growing chal- lenge of financing. The cap on interest rates imposed in 2016 constrained credit markets in Kenya over the past two years, making it challenging to find funding for construction projects. In many cases this means relying on joint ventures or foreign investment rather than borrowing locally. Adding to private financing challenges is the government’s high debt burden, with a particularly large portion owed in shorter term loans to the Chinese. If the government is to continue funding proj- ects, they must also convince markets their high levels of debt remain sustainable. Costs Consumer price inflation in Kenya has shrunk back in 2018 to more manageable levels, after the occasionally double digit inflation seen in 2017. Standing at 4,3% in June 2018, this lower level of inflation in the wider economy means that short of curren- cy effects, material costs are unlikely to see any inflation related pressure. 

which is increasingly driving growth in real estate as businesses expand, incomes grow and construc- tion booms to meet these new demands. Nairobi is even somewhat a victim of its own success with people flocking to the

The South African government is still struggling with balancing reforming the economy sufficiently to renew investor confidence, and the need to maintain popular support in the run up to the 2019 election with very constrained budgets.

PROPERTY

Africa’s next top property trends Major trends that are likely to shape Africa’s property market in the future show the sector is getting smarter. It is responding to infrastructure and social challenges, and easing the ability to do business on the continent. These trends also reveal exciting opportunities for property investment across its multiple distinct markets.

But a pressing issue many African countries face is the lack of durable, low-cost housing with a minimum standard of infrastructure to prevent the spread of diseases. “The target group for low-cost housing, in general, does not have enough equity or credit history to finance the purchase of even low- cost dwelling units. Without innovative financing solutions there can be no mass supply of low-cost dwelling units,” says Eckardt Dauck, Chairman for Zero Carbon Designs. To address challenges around quality, Zero Carbon Designs has developed solutions that are based on a local value chain including raw-material sourcing, planning, manufacturing, and construction. “Our processes ensure job creation and income within the country, while products are manufactured under strict quality con- trols. They are scalable, allowing for large numbers of housing units to be built, and they quick to construct, ensuring project finance costs are low, and they are also sustainable, environmentally friendly and carbon neutral,” he says. Student accommodation Student accommodation is very much emerging in greater Africa, with the supply of student housing still low on the continent, South Africa being the exception. Craig McMurray, Respublica CEO, says that while there are region- al and nodal hotspots across all geographies, the African continent primarily sees domestic student demand and one where the highest need is an affordable product. “This is in contrast to the more developed markets in Europe, UK, and Australia, which are primarily driven by international student demand and generally higher levels of affordability,” he says. Respublica started out eight years ago with their first facility of 300 beds and will be nearing 10 000 beds across the country by January next year. “We believe that the demand for tertiary education will likely be driven by increasing urbanisation, higher living standards, mobility, as well as technological advancement in educational content deliv- ery. This will have differing implications for the industry. However, I expect the demand trend to be upwardly steep but continually constrained by affordability at state, university and student levels,” notes McMurray. Serviced apartments Serviced apartments in Africa represent less than 1% of all hotel rooms whereas internationally the figure is close to 9%. Currently, the highest concentration is in South Africa.

F or its 9 th consecutive year, the Africa Property Investment (API) Summit & Expo, held at the Sandton Convention Centre on Thursday 20 and Friday 21 September 2018, unpacked and highlight- ed some of the key trends affecting the continent’s real estate sector. Providing access to the largest pool of real estate investors, developers and stakeholders on the continent, this year’s API Summit will provide the ideal setting for global players and local businesses to discuss a wide variety of industry trends, including: Industrial property Due to a lack of professionally managed logistics infrastructure and inefficient supply chains across sub-Saharan Africa, logistics cost as a percentage of product retail costs is still very high at 30-40%. According to Toby Selman, CEO for Africa Logistics Properties, there is currently almost no grade-A warehousing on the continent. “It tends to be the ugly duckling in the property sector as most in- vestors flock to offices and retail first. And while most investors think the highest demand comes from multinationals, it is the fast-growing regional companies that tend to be the first movers, largely because they have higher local growth rates than the international companies. We see the main demand for our facilities from e-commerce, third-par- ty logistics companies, product distributors and retailers,” he says. Africa Logistics Properties believe they are helping to solve the logistics infrastructure challenge with their privately-financed distribution and industrial facilities for the rental market. “We are disrupting the status quo with our modern logistics and distribution warehouses, offering businesses the chance to consoli- date existing go-down based operations into a purpose-built grade-A facility at an affordable cost for the very first time.” Affordable housing While governments can no longer afford to ignore the housing crisis, developers are coming to understand that low-cost housing can be a significant and lucrative market. Innovative financing structures backed by global institutional investors could also allow large-scale implementation.

The Capital, which dominates the South African market, has combined serviced apartments with its regular hotel and conferencing to give their clients all the services of a hotel such as security, flexibility of stay length, room service, and a concierge at the same high standard expected in 4 and 5-star hotels. “Due to historic undersupply, serviced apartments are increasing. Africa requires a secure and affordable alternative to regular hotels for consultants to stay for the many projects in Africa as the continent, unfortunately, imports a lot of skills internationally,” says Marc Wachsberger, Managing Director for The Capital. While there is no shortage of long-stay accommodation available, not all experiences are equal. The Capital’s model, which has taken 10 years to develop, emphasises operational skills to ensure that extended stay is positioned correctly in the market. 

Craig McMurray, CEO Respublica Student Living.

Eckardt Dauck, Chairman of Zero Carbon Designs, UK & Kenya.

Marc Wachsberger, MD The Capital Hotels-Apartments.

Toby Selman, CEO Africa Logistics Properties.

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