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An energy perspective on using capital infrastructure to leverage Africa’s potential
Africa must grow. The continent has immense resources, including 13% of the world's oil; 46% of its diamonds; 21% of its gold; 57% of its cobalt; and 50% of global platinum-group metals. The world needs these resources. The people of Africa need and want to improve their living conditions and need energy for this to materialise.
The map above shows that more than 620 million sub-Saharan Africans live without access to electricity; this is more than in any world region and makes up nearly half of the global total. It is undeniable that Africa's infrastructure spend can only have a positive trajectory that will generate enormous opportunity. There are a few conventional ways in which to benefit from this growth, including penetrating African markets with goods and services, mergers and acquisitions (M&A) and returns from project financing.
Is South Africa positioned to take advantage of this growth and what does our country need to do to ensure that it is part of that growth? The concise, respective answers are "NOT on the scale required" and "We still have a lot to do". South African private enterprises can and must invest in a sustainable way to make a more significant contribution to the economy, a way that provides a cumulative, compounding effect. What am I talking about? Well, the imperative is to invest in skills, knowledge and experience for South Africa and Africa which will lead to a growing core competency and capability. Invest in the future, so that 10, 50, 100 years or a millennium from now the skills and intellectual capacity on this continent will be established and mature, and the citizens of Africa will benefit from the compounding effect.
South Africa is building significant power infrastructure including the Medupi, Kusile and Ingula Power Stations and numerous renewable energy power plants. Should South Africa proceed with the nuclear build programme of 9600MWe, or even a portion thereof, the country has more suitable local skills now than before for such an undertaking. The skills may not be sufficient to build a complete nuclear power plant independently now, but there is a stronger case for greater localisation. The imperative for our government and private enterprise is to take a long-term view and ensure that we are part of project managing and building infrastructure in the rest of Africa. We must encourage partnerships with other African countries to hire from South Africa. In this way, the skills capability will be retained and enhanced on the continent.
When building thermal power stations, renewable energy power plants, substations, power lines, etc., along with that comes the building of dams, roads, railway lines, offices, workshops, information and communications technology (ICT) infrastructure, houses and other accommodation. The list goes on. The project management, design, construction and other skills developed in the process are phenomenal. We create economies within an economy. The Medupi Power Station build project in Lephalale alone is estimated to directly grow South Africa's GDP by approximately 0,35% per annum and more than 17 000 jobs are being created. The Kusile Power Station in Mpumalanga is estimated to create more than 20 000 jobs. The key sustainability factor is to ensure that the competency and capability being developed now has perpetual returns in the future.
Medupi Power Station
The reality is that there are so many disciplines involved in these mega projects and so many opportunities to build skills and capability. Energy infrastructure projects require almost all disciplines of engineers to plan networks, design the infrastructure, and value-engineer them to completion. There are cost controllers, accountants, contracts managers, claims managers, surveyors, lawyers, technicians, artisans from multiple disciplines, labourers, human resource managers, public relations practitioners, etc., all working full time on such mega projects for five or more years. These mega projects create exciting and rewarding prospects and spawn new business and investments. Spin-off businesses and entrepreneurship opportunities are created in the process. New and existing manufacturing plants are developed, transport services are created or expanded, and the food and catering industry expands.
South Africa is now in a position to take full advantage of the knowledge, skills and experience being developed. The skill and craft of competent project directors, programme managers, and project managers to lead, manage and integrate all the other disciplines within such complicated and complex projects are inextricably important for success. The case for Project Management Offices (PMOs) is growing and brings with it exciting opportunities within the project management discipline including:
improving programme and portfolio management skills;
improving PM processes and methodology;
enhancing knowledge management; and incorporating and augmenting mentoring and coaching.
On the difference between the ideals of 'architecture' and mere 'construction', the renowned 20th century architect Le Corbusier wrote: "You employ stone, wood, and concrete, and with these materials you build houses and palaces: that is construction. Ingenuity is at work. But suddenly you touch my heart, you do me good. I am happy and I say: This is beautiful. That is Architecture". My contention is that sound project management can bring architecture and construction together. With suitable leadership one can design and build sustainable skills through projects and touch even more human hearts with the resultant outcomes.
We sincerely welcome expats from other countries to help build our infrastructure. South Africa is after all a country that promotes humanity and global integration, and right now we need those skills. Interestingly, a study by the EON Consulting Group shows that on average South Africa needs three times more people to build a power station in the same time that it takes to build an equivalent in the USA. My point is that productivity levels are low in our industry and we as project managers (PMs), programme managers (PgMs), portfolio managers (PFMs) and project directors (PDs) have to contend with low productivity during a project. There is a need to be strategic and to use projects and other industries to improve skills to help improve productivity. South Africa's productivity KPI is not sustainable and has to be improved with a deliberate strategy, action and monitoring. Let us position ourselves in such a way that, when multiple R100 billion power plants are being built anywhere in Africa and the rest of the globe, the skills are sourced from South Africa and over time from Africa. South African organisations must position themselves to be the preferred strategic partners on global platforms.
The National Planning Commission overseeing the National Development Plan (NDP), the South African Department of Economic Development, the Presidential Infrastructure Coordinating Commission (PICC), and parastatals such as Eskom, Transnet and others should make a deliberate effort to improve this 3:1 low productivity ratio KPI. Private industry and project finance companies should incorporate the benefits of skills development into their financing models, which will increase longer-term secondary benefits for the country and the continent. More importantly, we as individuals have a responsibility to ensure that we educate ourselves at the best institutions and acquire the best skills in our fields.
So what is in it for us? Why should we do this? Well, naturally, if South Africa is partnering with the rest of Africa in infrastructure build programmes, this will result in an inflow of foreign investment and growth in GDP and build strategic relationships for future projects and cooperation. A mature project management capability reduces time and cost overruns, thereby reducing the cost of doing business and enhancing ROI. But, dare I say, even more important is that it will ensure that our children and future generations have better lives than are currently experienced by the majority of Africa's population. Building competency and capability through education, knowledge and practical experience can only be beneficial. This creates sustainable transformation and helps eliminate poverty, starvation and inequality in Africa. It will even reduce geopolitical tensions in Africa. It will definitely move Africa from a culture of dependence and foreign aid to a culture of independence and interdependence.
is a contracts management advisor with approximately 19 years of engineering experience and capability in programme and project management of large and mega engineering projects. He is passionate about leadership, strategy, project management, education and innovation. He has a keen interest in finding sustainable ways to create employment in South Africa with the overarching objective of reducing poverty, inequality and crime. He is a part-time faculty member of USB-ED, lecturing in Project Management.
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