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