Budget Speech 2022 – SA Cash Strapped – CESA Echoes the Minister’s Sentiments
24 February 2022 On the back to the 2022 Budget just released, Consulting Engineers South Africa (CESA) is pleased to hear that Government is looking at value for money and quality of delivery as the top priority in the development of the project pipeline. This is particularly important to ensure the sustainable development of infrastructure.
“As a cash-strapped country with low economic growth prospects, it is now more than ever imperative that we spend our money wisely,” states Chris Campbell, CEO of CESA.
“When you are looking at the cost of an infrastructure project you need to consider the total cost of ownership spanning the typical 30 years or more of the project lifecycle,” he adds. This lifecycle includes planning and design, construction, operations and maintenance. The planning and design services typically only makes up 2% of the total cost of ownership, but most importantly has a major impact on the more than 80% long-term costs of operation and maintenance of the project. It is therefore critical that during the planning and design phase that one procures the best engineering services offering the latest innovation and not procure the cheapest services.
“You cannot procure infrastructure services in the same manner that you procure ball point pens on the basis of the lowest price – in doing so, you will regret the long-term implications of the cost of operations and maintenance of the infrastructure.
“We are not suggesting that you go for the most expensive solution but rather opt for a Quality Cost-Based Selection (QCBS), where evaluation is based on cost as well as technical capability with quality being the most important factor”, argues Campbell.
Paying the least amount of money for planning and design services for an infrastructure project with a lifespan of 30 years or more is counter-intuitive. “The impact of the failure of such infrastructure, if not properly designed and planned, can have a negative impact on the lives and the livelihoods of citizens for whom these projects are intended to benefit and create a conducive environment for economic growth.”
“We have for some time been ‘beating the drum’ on the need for value for money and quality delivery in our infrastructure investment pursuits. It is with great excitement to hear the Minister make this very statement in his budget speech. As an industry we welcome the implementation of this approach,” Campbell adds.
CESA is also eager to contribute to the revised Public Procurement Bill that will be tabled before Parliament in 2022/23. This is in light of the recent Constitutional Court judgement on the preferential procurement regulations, and the first Zondo Commission report highlighting abuses in state procurement. It is also pleasing to hear that Government plans on taking bold steps to improve state capability and reduce the scope for procurement corruption.
CESA Contact details:
Bonolo Nkgodi
Manager: Marketing and Communications
Tel: 079 687 4565
Bonolo@cesa.co.za