Felix Fongoqa, President of CESA presented his message and theme for 2009 at a function held in February.  Fongoqa stated that, “During 2008 CESA took an important decision to reposition consulting engineers in South Africa with the launch of our new identity.  Our Organisation, formerly known as the South African Association of Consulting Engineers (SAACE) is now known as CESA and is the proud ‘Voice of Consulting Engineering in South Africa’.” This will be his theme for the year and is linked to the Strategic Goals for 2009/10.

He stated that as an industry consulting engineers are taking a cautionary approach in view of the effects of the global credit squeeze. The International Federation of Consulting Engineers (FIDIC) has indicated that globally the skills shortage crisis is no longer a major factor and that companies are retrenching engineers as a result of the financial crisis.  Fongoqa believes that this may be an opportunity to attract those skills back to South Africa but that this will require a high level of cooperation between Government and industry.
  
Fongoqa believes it is at times like these that as an industry they truly appreciate the Government’s infrastructure development programme as it will essentially keep the consulting engineering industry on track in these tough times. CESA welcomes the Budget news that spend on infrastructure will reach close to R800 billion over the next 3 years and find it encouraging that Government has prioritised ESKOM, Housing, Water and Sanitation and the Expanded Public Works Programme.  CESA plans to partner with Government in ensuring that their investment objectives are realised.  Fongoqa states, “Engineers are innovators that can rise to the challenge of ensuring that their designs allow for maximum use of labour during construction and that the ideal of sustainable development is achieved”.  He is however concerned about the negative consequences of not focusing on the maintenance of existing infrastructure particularly in the local government sphere, in particular the dysfunction of some municipal water and waste water treatment works around the country.

CESA has 7 very clear Strategic Goals for the coming year:

1.    Advanced advocacy and engagement with decision makers

CESA’s aim for 2009 is to increasingly influence decision making and policies at the highest level via regular contact with relevant Ministers and Director Generals and have set up a programme in this regard.  In line with this they plan to facilitate the re-establishment of a single entity which represents the voice of the construction industry, all parties as well as to partner with various business organisations in order to widen their sphere of influence.

2.    Promote the concept of sustainable development

A key objective this year for CESA is to promote the concept of sustainable development. Fongoqa believes that as an industry they can make a difference by contributing significantly towards the reduction of our country’s carbon footprint and embracing a sustainable approach to the provision, use and maintenance of infrastructure.  CESA has established a task team to develop a policy framework in this regard and will ensure that activities are aligned to international best practice.

3.    Re-capacitate client entities to enhance service delivery

CESA plans to continue their work aimed at providing an effective mechanism to accelerate service delivery in the Public Sector by assisting with the re-capacitation of client entities.  To date CESA has undertaken a number of successful projects in this regard leading to the creation of the Project Development and Facilitation Alliance (PDFA) which is a Section 21 company.  A memorandum of understanding has been prepared which will enable CESA to roll this programme out to other municipalities.

Associated with this initiative, CESA will be rolling out a training schedule through their School of Consulting Engineering (SCE) to educate decision makers and officials in infrastructure lifecycle management.  They also plan to establish a relationship and create a Memorandum of Understanding with organisations such as the South African Local Government Association (SALGA) and the Institute of Local Government Management (ILGM) in order to facilitate a connection between them as clients and members’ collectively capacitate to assist in the rollout of infrastructure as well as the maintenance of existing assets.

4.    Enhance the level of education and training in the consulting engineering sector

CESA’s Young Professionals Forum (YPF) will continue to be a key player in rolling out their strategy of promoting engineering as a career of choice among our country’s top learners as well as creating a platform for the implementation of structured training and mentoring programmes for the industry. They will continue to engage with the Engineering Council of South Africa (ECSA) in order to ensure that engineering education, particularly at technikons, is in line with industry needs.  CESA will also be interacting with universities and technikons in order to influence the quality and appropriateness of engineering education.

5.    Reduce propensity for crime and corruption in the construction industry

A major focus this year for CESA is to reduce the propensity for crime and corruption which is undermining the Construction Industry.  They plan to achieve this through the coordination of anticrime initiatives including the organisation of an Anti-Corruption and Business Integrity Indaba to be held later this year.  Fongoqa states that in line with this goal, CESA spent last year promoting the adoption of FIDIC’s Business Integrity Management System (BIMS) as part of their drive to ensure that we maintain a high level of integrity within the sector. They intend to move from awareness to the implementation of BIMS within their member firms as part of their Quality Management System.

CESA has adopted a zero tolerance approach to all forms of corruption and lack of integrity.  CESA will expel members found guilty of any of these practices.  Fongoqa states that, “Anyone wishing to approach any of our members for corruption, even if it is guised as a request for gifts, should think twice from now onwards.  You will get caught!”

Following on from this they would like to see Public Sector clients adopt the Government Procurement Integrity Management System (GPIMS).  GPIMS goes beyond just an anti-corruption drive, but provides a guideline that will ensure that a high level of integrity prevails among those that are in positions of trust.  Fongoqa states that, “As an organisation we will be lobbying Government to adopt and underwrite this system as a matter of national policy with respect to the procurement of infrastructure”.

6.    Promulgation and roll out of the Construction Industry Charter

The past five years have been very productive and have culminated in the Construction Industry Charter being gazetted for public comment and CESA is hopeful that it will be promulgated shortly should there be no substantial objections.  In this regard they are gearing up to support the roll out process so that both members and clients adopt the Charter for the good of transformation in the industry.  They are also eagerly awaiting Government’s review of the procurement policy and will be engaging with Treasury on an ongoing basis in this regard with the aim of ensuring a harmonised procurement policy.

7.    Finalisation of the Procurement Policy

Lastly they will be focusing on the finalisation and publication of CESA’s Procurement of Consulting Engineering Services in the Construction Industry Guideline and ensuring that these are adopted by the Construction Industry Development Board (CIDB).  CESA will also be working on creating awareness among clients and members through countrywide Procurement Indaba Road Shows.

Fongoqa concluded by stating that CESA plans to be part of the solution to some of the problems currently facing our country.  He stated that it is imperative that the consulting engineering sector is relevant, and that as trusted advisors they continue to play their part in ensuring that South Africa is a winning nation and that the communities they serve enjoy an improved quality of life.  CESA also wants to ensure that the environment within which they conduct their business is conducive to sustainable growth.

Standing (L-R)

Front Row (L-R)

Absent

The results of our bi-annual Consulting Engineers South Africa (CESA) Management Information Survey (MIS) for the period July to December 2008 just released, indicate that our industry continues to grow although it is starting to show a slight leveling off with companies becoming more cautious. It is ‘business as usual’ for most Consulting Engineering companies apart from those operating in the Mining and Commercial & Industrial Property where the current economic climate has had a definite negative impact. Good news is that international work within Africa is on the increase.

For the first time since 2002 there has been a marked shift in engineering confidence. Confidence levels among consulting engineers have remained above 98% since 2005, showing exceptional levels of satisfaction with current working conditions, despite facing challenges including skills shortages. However, confidence levels will continue to deteriorate for 2009, as the index falls from 99.8% to an expected 84.3% in the first half of 2009 and to 75.2% in the last six months of 2009, the lowest level since December 2003.

The survey indicates that nominal fee income increased by 15% in the second half of 2008 compared to the first six months of 2008 or by 61% compared to the same period in 2008. This means that nominal fee income has increased by double digit annual growth rates since December 2004.

The average net profit (before tax) moderated in the last six months, from 19,4% for the first six months of 2008 to 18,4%, while profit margins are expected to moderate further in the first six months of 2009, to an average of between 15% and 16%. Nonetheless, more than a third of the respondents were highly satisfied with the current profit margin. Delayed payments continues to be a problem with fee income outstanding for more than 90 days or more increasing from 11,1% in the previous survey to 13,6% currently totaling R2 321million.

There was a distinct shift in the demand for engineers in this survey with the percentage of respondents looking for engineers falling from 94,5% in the December 2007 survey to 33.2%  in the December 2008 survey, the lowest level since the December 1999 survey.  Economic uncertainty coupled with rapidly increasing labour costs, means a more cautious approach to employment opportunities.  Almost all firms continue to report problems with the recruitment of engineers with fewer reporting difficulties with recruiting technicians (including PDI’s).

The report shows that the engineering industry continues to operate at close to 100% capacity, which will sooner or later start to impact on the growth potential in the industry, that cannot continue to increase exponentially without a subsequent increase in resources. Capacity levels of technical staff are dangerously close to 100%, but spare capacity has increased from 2% to 5% since the last survey. Most respondents, 79%, expect capacity utilisation to remain static in the next 6 to 12 months.

Total fee earnings increased in all of the nine provinces, except in the North West province where fee earnings fell by 26% y/y following a 62% annual increase in the June 2008 survey.  High capacity provinces gained more prominence contributing a higher 83,2% of total fee earnings, compared to 80% in the December 2007 survey. High capacity provinces include Gauteng, Western Cape, Eastern Cape and KwaZulu Natal.
More than a third of annualised fee earnings were generated in Gauteng (38,9%), followed by 12,9% in Western Cape and 12,3% in KwaZulu Natal. In the latest survey, a higher 12,5% (compared to only 4,5% in the December 2007 survey) of fee earnings were generated in Africa and a 5,2% percent in the  international market

The contribution of local authorities, private sector and state owned enterprises increased notably. Capital projects from state owned enterprises and smaller to medium size infrastructure projects funded through the municipal infrastructure grant supported earnings from state owned enterprises and local government.  The public sector, contributed 61,2% to fee earnings in the last six months of 2008, while the role of the private sector moderated from just over 40% in December 2007 to 38% in December 2008.  I believe that more emphasis should be placed on the maintenance of infrastructure, where the municipal infrastructure grant can make a significant contribution. We are duly concerned over the lack of emphasis on infrastructure maintenance and in particular that of municipal water and waste water treatment works around the country.

As engineering and technical skills remain a scarce resource in South Africa, the need for training intensifies. Approximately 23% of the firms that responded to the survey spent more than 2,5% of their salary and wage bill on direct training costs.  Our industry spent approximately R40 million on bursaries according to the December 2008 survey.  The engineering industry has already achieved (in fact exceeded) the target set in the Construction Charter, which states that 0,3% of the payroll must be spent on bursary expenditure on black students.

On a very positive note the overall service of CESA and our Directorate continues to be rated highly among member firms with the overall satisfaction rate improving in the December 2008 survey. We remain challenged by medium and smaller firms that are in dire need of industry representation, as they look to us as a watchdog on their behalf to ensure industry standards and integrity is maintained.

In conclusion tougher working conditions are expected during 2009, as confidence levels slipped in the December 2008 survey. The need to address critical issues such as pricing, improved procurement processes and client education will escalate in coming months.  The complete MIS report is available on the CESA website at www.cesa.co.za.

Graham Pirie

Representatives of Consulting Engineers from across the African continent met at a conference held in Durban during March to discuss the role engineers play in achieving the United Nations’ 8 Millennium Development Goals (MDGs) for the World and the African continent.  Over 170 professionals attended the GAMA conference and AGM which was hosted this year in South Africa by the current Secretariat of GAMA, Consulting Engineers South Africa (CESA).  The Group of African Member Associations (GAMA) is a member of the International Federation of Consulting Engineers (FIDIC).  African countries  represented at the conference included Sudan, Tunisia, Libya; Nigeria, Botswana; Tanzania; Uganda; Kenya; Zambia; Mozambique and South Africa.  The current President of FIDIC, John Boyd from Canada and FIDIC’s CEO, Enrico Vink from their Secretariat’s offices in Switzerland also attended and gave presentations at the conference.

In 1992, at the Rio Conference of world leaders, a number of critical issues were identified that had to be addressed if humankind was to have a more sustainable future.  There was enormous global enthusiasm over this sustainable development concept but very little tangible action and so in 2000, a resolution called the Millennium Declaration was adopted at the United Nations General Assembly identifying a subset of these sustainability issues that were considered to be of particular urgency.  These became known as the Millennium Development Goals. There are 8 MDGs with a due date for certain specific targets to be reached by 2015.  Although there has been progress on all of these goals, almost without exception humanity will fail to meet the target date. John Boyd, President of FIDIC stated, “In order to achieve social and economic growth it is most important that there is a strong infrastructure in place”. The 8 global objectives are:

• Eradicate extreme poverty and hunger
• Achieve universal primary education
• Promote gender equality and empower women
• Reduce child mortality
• Improve maternal health
• Combat HIV and AIDS, malaria and other diseases
• Ensure environmental sustainability
• Develop a global partnership for development

During the conference discussions around how engineers can influence government with respect to policy making at provincial and country level was debated by delegates and it was noted that CESA was doing a lot of work in this regard and had recorded a number of successes.  A strong theme that ran throughout the conference was political will, or lack thereof, has resulted in lack of economic growth on the continent.

John Boyd, President of FIDIC and an expert in the field, gave a presentation on Project Sustainability Management and how to incorporate MDG issues in every project that is carried out.  He stated that FIDIC has had a long term focus on the issue of sustainable development and has developed a number of guidelines in this regard.  Boyd stated that it is important to convince clients to use these guidelines and to encourage them to participate in how we should be operating in the future.  Boyd believes that Engineers need to build their role as leaders by advocating for sustainable development and to recognise the need for projects that support social development in addition to more traditional engineering projects.

Abdulhamed Abou Abdalla from Libya and Ian Young from Kwezi V3 gave a joint presentation on ‘Achieving the MDGs – The Libyan Experience’, in which they stated that there was a need for external consultants to form partnerships with investment banks and Libyan consultants to provide turnkey solutions in the country. It was also stated that Libya has a generous set of fee scales but also has very high standards.

The prospect of achieving Millennium Development Goals for Africa relies heavily on the capacity of transport infrastructure on the continent. Mark Skelton from SSI Engineers and Environmental Consultants gave a presentation on the Development of Airports in Botswana, Tanzania, Kenya and Mozambique.  This was followed by a presentation by Engineer Raphael Mabenga, Director of the National Roads Agency of Zambia on Zambia’s Road Building Programme. His presentation on how Zambia has reformed their road sector was very well received. Delegates from different countries were very interested in the Zambian model of reform as the funding and decisions around road construction have been de-politicised to a large degree. Construction of the Moses Mabhida Stadium in Durban was presented by Tim Terr Harr from BKS Consulting Engineers prior to a visit by delegates to the stadium.

Delegates at the construction site of the Moses Mabhida Stadium

Mayen Adetiba is pictured with outgoing GAMA President Exaud Mushi and John Boyd, President of the International Federation of Consulting Engineers (FIDIC) to which GAMA belongs.

The GAMA conference ended on a high note with the first female Chairperson of GAMA being elected to office at the AGM. Mayen Adetiba from the Association of Consulting Engineers Nigeria was elected as Chairperson of GAMA for a 2 year term, she will be ably assisted by Arthur Taute, the newly elected Deputy Chairperson from South Africa. Adetiba states, “In the context of infrastructure development some of the key issues that I will be focusing on in the coming year will be capacity building; the promotion of gender equality; and eradication of corruption on the African continent”.

Newly elected GAMA Executive Committee
Front L to R: George Sitali (Zambia), Mayen Adetiba, Chairperson (Nigeria), Arthur Taute, Deputy Chairperson (South Africa)
Back L to R:  Nabil Chater (Tunisia), Mwesigwa Kamulali (Tanzania), Ashraf Zaki (Sudan), Robert Izzett (Botswana)

As part of her presentation given at the recent Group of African Member Associations (GAMA) Conference held in Durban, Chairperson of the YPF, Kieren Brown proudly presented delegates with the newly designed YPF logo.

Young Professionals from CESA member firms were invited to participate in a competition to redesign the YPF logo in keeping with CESA’s rebranding process.  54 designs submitted by Young Professionals from 11 different companies were received.  The YPF’s National Committee members, as well as Godfrey Ramalisa and Kuvashnee Govender from CESA’s Directorate participated in the voting process.

Kieren Brown enthused, “It was a very difficult competition to judge since the quality of the entries was outstanding.”  The winning design comes from Terence Thumbaya, who is a Civil Engineer specialising in the water sector working for CBI Consulting Engineers in Durban.

Felix Fongoqa, President of CESA is currently in the process of visiting all of the Organisation’s nationwide branches to present his message for the year.

CESA welcomes Wally Mayne who joined the Organisation as Contractual Affairs Manager on the 1 December 2008.  Wally matriculated from Michaelhouse and holds an MSc in Civil Engineering and an MBA, both from the University of Witwatersrand. 

Wally has an extensive background in local government and prior to joining CESA held the post of Chief Executive Officer of the Water Institute of Southern Africa (WISA) for a period of 3 years until his contract came to an end and he started to look for fresh opportunities.

As Contractual Affairs Manager for CESA, Wally is responsible for the Contractual Affairs section of the directorate and is tasked with all contractual matters as well as existing and new legislation affecting the industry.  He is responsible for legal matters affecting CESA as well as risk management and insurance issues; disciplinary matters (CESA Code of Conduct); and procurement legislation.

Wally provides assistance to member firms as follows:

Procurement
The Contractual Affairs Division (CA) assists member firms and clients with queries relating to procurement legislation.  The legislative environment is also monitored in order to keep members up to date with the latest information.  Member firms can report illegal prescripts in procurement policies of public sector clients and CA will engage with the client on their behalf.  This is done in cooperation with the CIDB or National Treasury, where applicable.  Assistance is also rendered with the interpretation of procurement contracts as well as other contractual queries.

Legislation
The Contractual Affairs Division assists members with matters relating to other legislation pertaining to the Construction Industry, e.g. the Occupational Health and Safety Act including construction regulations pertaining to the Act.

Liaison
The Contractual Affairs Division is involved in liaison with a number of public sector clients and organs of state that include, ESKOM, CIDB, ECSA (fees forum) and National Treasury.

Assistance is also rendered to committees within CESA relating to business affecting members.  This includes the Supply Chain Management and Quality and Risk Committees.  Assistance is also provided to the Disciplinary Committee where matters pertaining to contraventions of the CESA Code of Conduct are concerned.  In addition to this Contractual Affairs provides assistance to the Project Development and Facilitation Alliance (PDFA).

Wally is registered with the Engineering Council of South Africa (ECSA) as a Professional Engineer since 1985 and is a Fellow of the South African Institution of Civil Engineers (SAICE).  He has also been a member of the Institution of Municipal Engineers (IMESA) since 1990 and is a member of the Water Institute of Southern Africa (WISA).  In addition to this Wally has been Chairperson of the Avril Elizabeth Home for the mentally handicapped since 2003 and was a member of their Executive Committee prior to this. He is married to Les and has 3 children.

The CESA/Glenrand M.I.B Engineering Excellence Awards is a celebration of innovation, quality, outstanding workmanship and professionalism.  CESA is proud to host this annual event as a platform to showcase the outstanding achievements of our member organisations. This year the Awards Banquet will be held on Wednesday the 12th August 2009 at Emperor’s Palace, Kempton Park in Johannesburg. The deadline for Pre-entries has already closed and member firms who have submitted pre-entries should already have received notification as to the success of their submission.  The date for the submission of full entries for those firms that complied with pre-entry requirements is Friday the 15th May 2009.

The Awards focus on consulting engineers and their clients who participate in or initiate projects that promote the advancement of our nation and the people of the continent.  

Projects eligible for these prestigious Awards range from those illustrating the benefits of innovative solutions in the advancement of communities to multi-million rand investments and fall into the following categories:

• Projects with a value greater than R100 Million
• Projects ranging in the value of R10 Million to R100 Million
• Projects with a value less than R10 Million

Additional categories which member firms were invited to enter are:

• Business Excellence Award
• Young Company of the Year Award
• International Business Developer of the Year Award
• Mentoring Company of the Year Award

Members were invited to nominate and motivate entries for candidates in the following categories:

• Young Engineer of the Year Award
• Mentor of the Year Award

Member firms were also asked to motivate nominations for consideration by CESA in the following categories:

• Visionary Client of the Year Award
• Publisher of the Year Award

The Visionary Client of the Year Award is a CESA sponsored award and mention is only made of the one client that is voted for by the CESA Executive Committee at the Awards ceremony. No mention of nominees for this award is made at the Awards ceremony.