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News & Press: 2019 News items

The South African Construction Industry - Some things to think about and action!

Saturday, 06 July 2019  
Posted by: Bert vd Heever
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Gavin Taylor, COO at Grinaker-LTA, writes on LinkedIn: ..."Not unlike lemmings we have raced toward the precipice and with a few inches to go, we need to decide if we are going to dig our heels in and sort ourselves out or just jump into the abyss."

He continues: "The simple fact; since 2010 the weak business environment has been accelerating, creating an era of unsustainable competition, coupled with the correctly proven assumption by unscrupulous developers, both public and private, that “there will always be a company that will accept the risk and as long as they have a balance sheet, and we will continue pushing the risk down until they fail” and this has now reached breaking point. It makes me both sad and angry that companies like G5, Basil Read, NMC, Liviero, Pro-Build and countless other smaller contractors and sub-contractors have fallen into the abyss.

This process has got to change before we kill our industry and allow the large foreign businesses to take their place at our table. We should perhaps consider a move closer towards the French model where the lowest and highest bidders on any tender are excluded and the evaluation and award of contracts is not concluded on price alone.* I have not yet met the South African developer who walks that talk.

Likewise, professional consultants have been challenged to reduce their fees out of proportion and below industry agreed scales and in many cases have accepted incentives or penalties on performance in order to be awarded professional commissions, the upshot of which is that they have had to cut costs which has had the effect that expertise and staff compliment required to design and / or administer the project has not met with the required standard or where a design error has been made, the contractor has been an easy target to recoup a loss. This has been a contributing factor to the adversarial contracting style prevailing in our industry.

On the face of it, the better the documentation is at tender stage, the more robust the tender and the greater the predictability of the outcome will be. Too many projects are only half designed and poorly specified when they are started. Consultants should be appointed at industry agreed fee levels based on their design proposals and expertise of the team that they put forward for the specific project. The second thing that really makes my blood boil is that they should be independent (that’s why the industry fee scales were agreed in the first place) and I personally would view any developer with in-house consultancy services as a material risk if I was to consider contracting with them as there is no independence and if they choose this route why do they not have their own in-house construction team other than to mitigate risk."

Mr Taylor raises several other issues that are contributing to the present critical situation. On employee competence, he says that: "Our curriculum in institutes of higher learning and trade schools are out of touch with the changing requirements of our industry. How are we going to get better without understanding the “competency tools” required to deliver quality consistently and having the curriculum to match those requirements. Gone are the days (in our industry) where newly qualified people were properly managed when first entering the work place and their competency supplemented by proper on the job training and career mapping, for them to collect the tools to grow and progress through the organisations."

He also gives his opinion on the "Construction Mafia" and we urge you to read his article and leave your comments, whether you agree to his views or not. It is time that those left in the South African Construction industry realise that the envrionment they are working in is on life support and requires specialikst treatment if it is to recover from it's latest cardiac arrest.

Please click here to read the full article

* Emphasis is that of the Editor. Mr Taylor's views echo those that the Editor, then President of the ASAQS, exprssed in an interview with The Star in january 2016 which is available here. We thank Mr Des Linder for bringing this article to our attention.

Mr Taylor's views are underscored in this article written by Werner Jerling which recently appeared in the SAICE Civil Engineering magazine :

South African Construction – an ecosystem in crisis

Recent media coverage of appeals by SAFCEC, CESA and others to government to intervene and save our industry has caught the attention of many a Civil Engineer. We work and ply our trade in a sensitive ecosystem that is a jewel in the crown of South Africa. We are in fact one of the few countries in Africa that still has a fully functioning and self-sufficient construction industry. But we are in trouble. The construction industry ecosystem is like a biological ecosystem – a very sensitive order of interrelated and interdependent entities. Damage or disrupt one, and the whole ecosystem suffers. In many cases innocuous meddling also causes unintended consequences.