The Civil Engineering Contractor January 2019 | Page 40

BUSINESS INTEL Wishing you a better new year! By Eamonn Ryan M uch has happened since that Q3 index rating, says Chris Campbell, CEO of CESA: “Our most recent survey of members suggests that in 2019, we may face a gradual upswing, following the announcement by President Cyril Ramaphosa of the establishment of a R400-billion infrastructure fund, which recognises the place of infrastructure to support that. What came out of the Presidential Jobs Summit, which CESA attended, was that there is clear agreement between government, business, and other social partners such as trade unions and communities within Nedlac. Much as it appeared ceremonial, there was a huge amount of substance behind that commitment, which supports the thinking that we can look forward to what next year may hold.” Jobs do not happen in isolation, he points out, but on the back of actual economic activity, and there has been a commitment to a number of infrastructure projects. “One is to develop more agri-parks, the idea being to establish forestry plantations on disused mines, which has the dual advantage of dealing with the acid drainage problem of mines (as eucalyptus in particular is not discriminating in the quality of water it uses), as well as supporting the forestry industry; and the ECIC (Export Credit Insurance Corporation) is extending 38 | CEC January 2019 its underwriting of liquefied natural gas (LNG) projects to Mozambique to the tune of USD1.2-billion, with a requisite requirement to involve South African companies at least to the extent of USD600-million of the LNG work. This is work that is right up the alley of our member companies,” says Campbell. Cause for hope, he notes, is a strong sentiment to improve municipal infrastructure, with businesses and the financial sector looking at how they can make sensible investments to improve capacity at municipal level. “That creates an opportunity for us to strengthen our partnership with our clients more directly through improving capacity among municipalities: assisting in the delivery process as well as upskilling for improved capacity among such technical practitioners that municipalities may have. We will be coordinating this with the Municipal Infrastructure Support Agency (MISA), which supports individual municipalities,” explains Campbell. Municipalities enjoy autonomy in terms of the responsibility borne by the three tiers of government. Campbell cites another project that may create jobs and infrastructure as the growth of the waste economy. “This all requires the development of infrastructure for commercial and bulk industrial recycling: products like ferro-chrome slag will require In Q3 2018, the FNB/BER Building Confidence Index registered a rock-bottom level of 29 and revealed a particularly sharp drop in subcontractor confidence. Does this leave much hope for 2019? Chris Campbell, CEO of CESA. input from practitioners from our industry.” Is this cause for optimism? Campbell thinks so, but is tempered by the fact that we are in the lead up to the 2019 election, and there will be some indecision ahead of that. “But there’s a sense of hope now which didn’t previously exist a year ago [in October 2018].” He gives an anonymous anecdote of how bad things have got: “There was recently a tender by one municipality to develop their own bus rapid transit (BRT) system. They had done no upfront work and didn’t even know what land would be appropriated. The response from the municipality to queries by interested contractors was ‘We want to transfer the risk to the service provider.’ We informed them they were not transferring the risk: all that would happen is they would get tenders on the one hand for R5-million with a list of qualifications, and on the other hand, tenders of well above R100-million — and they would not be able to make sense of these wildly disparate bids. We suggested they withdraw the tender in that form and rather commission www.civilsonline.co.za