AECOM ready to help get R100bn Infrastructure Fund off the ground
AECOM, the global leader in integrated infrastructure, is poised to play a role in potential projects that have significant support from the R100-billion Infrastructure Fund announced by President Cyril Ramaphosa in his State of the Nation Address on 11 February. This is according to Africa MD Darrin Green, who comments that there are opportunities in student housing, digitalisation and water infrastructure – all areas where AECOM has extensive experience and expertise.
President Ramaphosa stated that the Infrastructure Fund will blend resources from the fiscus with financing from the private sector and development institutions. Such partnering between government and the private sector is essential to get these projects off the ground and achieve results. Green notes that the government has also committed R791-billion worth of funding towards infrastructure in the 2021 Medium-Term Expenditure Framework (MTEF). Here efficient procurement is key in terms of the government’s capacity to bring projects to market in a timely fashion.
“We are all aware of the need for sound procurement principles, but real innovative thinking needs to happen so that procurement can be dramatically accelerated to have the necessary impact on the economy – and quickly.”AECOM Africa MD Darrin Green
He adds that the consulting engineering and construction sector has been in serious difficulty and shrinking for some time, certainly prior to the Covid-19 pandemic, and is steadily losing skills and capacity to support the infrastructure drive. “The emphasis needs to be on fast-track procurement and delivery,” urges Green.
The biggest opportunities in terms of infrastructure in Africa at the moment are: energy (particularly renewables such as hydro, wind and solar power), Environment, Social and Governance (ESG), digital-related infrastructure such as data centres, and basic infrastructure, especially in terms of water management, reuse and sustainability. Capacity and skills remain a challenge, while funding is always a constraint, especially where budgets are being redirected.
Looking ahead, Green predicts that 2021 is likely to be a year of consolidation and adaptation for AECOM. “The vaccine rollout will play a major role in both South Africa and the rest of Africa in terms of bringing back economic activity and confidence. The consulting engineering industry is key to economic recovery, being second in the supply chain after government and client procurement.”
On the international front, AECOM recently announced its ‘Think and Act Globally’ strategy to extend its industry-leading, global expertise to each of its projects around the world, transforming the way it delivers work through technology and digital platforms, and enhance its position as a leading ESG company.
Green highlights that this strategy is having a major impact in providing access to in-house subject matter experts around the world. “We now have prioritised time to talk with our global counterparts and share our expertise, opening up our knowledge networks exponentially. Also, as our digital communication tools utilisation becomes mainstream, accessing this network remotely has never been simpler, allowing innovative new client solutions to be shared quickly and efficiently.”
Here the focus is increasingly on digitalisation and innovation. “We certainly see these trends accelerating, and perhaps more so in Africa, where innovation and digital technology can leapfrog and bridge the relative absence of hard infrastructure,” notes Green. AECOM is spearheading all aspects of digital design tools, including virtual environmental stakeholder digital rooms and virtual whiteboarding tools for client planning sessions in the client interaction and project stakeholder realm. The use of remote sensing, drones and digital tools on-site for streamlining inspection requests, test results and approvals is also becoming more prominent, as with the pilot site at the Polihali Western Access Roads project in Lesotho.
Responding to the ongoing challenge posed by Covid-19 and the altered working landscape, Green stresses the importance of collaboration in meeting clients’ requirements in this difficult time. Face-to-face meetings, for example, have evolved into more complex remote experiences. However, technology tools and platforms are catching up. “The key is flexibility and using digital and physical tools to enhance the client experience in a tangible way through to the delivery of the project. Clients are now more digitally aware; we can provide digital twins for projects once the modelling is complete and work together to have efficient data at our fingertips,” elaborates Green.
“It is important to note that we can leverage AECOM’s world-leading skills for our clients. We can assist in more areas than one might realise – from digital engagement tools to ESG advisory to hard infrastructure and project management and controls. We strive for the flawless delivery of our projects. Considering all environmental impacts is crucial; at the core of what we do is our belief in building sustainable legacies. Sharing our significant internal data and solutions certainly allows us to build on our innovative experiences so that we keep improving and staying ahead of the pack,” concludes Green.View more
Increased infrastructure activity needed to boost economy
The decline in manufacturing production, at a time when increased industrial activity is important to revive the ailing economy, is very concerning, the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) said today.
SEIFSA Chief Economist Chifipa Mhango said the decline once again highlights the negative impact Covid-19-induced lockdown regulations had on the manufacturing industry and the economy in general, and that this situation needs to reversed urgently. According to figures released by Statistics South Africa (StatsSA), total manufacturing production declined by 3,4% year on year in January, with a slight 0,5% month-on-month increase from December 2020. Total manufacturing sales increased by 1,4% year on year in January 2021 and by 0,9% from December 2020.
However, Mhango welcomed the 5,3% year-on-year increase in January 2021 in the performance of the Metals and Engineering (M&E) sector, which accounts for 29% of manufacturing production. Total sales across the sector’s 13 sub-industries increased by 10,6% to reach R68,3-billion. He said this performance would need to be sustained through the speedy implementation of the Government’s infrastructure plans if the sector and the economy as a whole are to recover.
StatsSA figures also showed that total capacity utilisation in the manufacturing sector was 72,3%, down from 81% in 2019. In the M&E sector, average total capacity utilisation for 2020 was only 68%, again demonstrating how Covid-19 has inhibited production within the sector.
Mhango noted that with the economy has contracted by 7% in 2020, it is imperative that the Government intensifies its efforts to revive the ailing economy and focuses on the implementation of its recovery plans. He said while the Government’s policies were attractive on paper, more needed to be done to speed up the implementation of critical interventions such as the Steel Master Plan in order to benefit both the upstream and downstream of the M&E sector.
Mhango said the current state of the M&E sector remains dire, with declining levels of employment and investment, as well as a weak trading position with the rest of the world. He said with the country’s unemployment rate now at 32,5%, it is important to ensure that the industrial base is not eroded any further. “Fixed investment is key to reviving the sector. To grow the country’s industrial base, the fixed investment share of GDP needs to move to levels above 40%, from the current level where it is below 20%,” he said.
Mhango said while the Government’s commitment to spend R791,2-billion in the next three years on various infrastructure projects is commendable, the slow rate of implementation and the mismanagement of funds have derailed progress towards achieving a higher ratio of fixed investment to GDP.
“The M&E sector is heavily reliant on demand from key Government infrastructure projects to boost its production and sales, especially for products such as steel and other related downstream products such as roofing material. The lack of progress towards the implementation of these projects will only serve as a hinderance to reviving the South African
economy,” Mhango said.
SA’s transport sector in the age of Covid: A roadmap to economic recovery
The South African transport sector entered the age of Covid already beset by several major challenges. Ageing infrastructure; a lack of impartial regulatory bodies; an unfriendly environment for private sector collaboration; over-reliance on roads for both public transport and freight; and a skewered subsidy model are a few of the structural obstacles that were present.
Covid-19 has both highlighted and exacerbated these hurdles and must force the industry out of complacency. The challenges it faces must be viewed as opportunities with the problem areas providing a guide as to the solutions that can be delivered with maximum impact, where they’re most needed.
A study conducted in partnership by Business for SA and global management consultancy firm, Kearney found that the already beleaguered transport industry has been further imperiled in 2020, and in the absence of any interventions, would likely plunge into an L-shaped curve, in terms of both GDP generated and employment levels, from which it would take at least five years to emerge.
However, Sujeet Morar, Principal at global management consultancy Kearney, believes that the challenges are not insurmountable and that there are solutions in the form of interventions that have the potential to deliver up to R223 billion and create up to 168 000 formal sector jobs, figures which far exceed the potential losses incurred by the Covid-19 pandemic. But for these to be effective government will have to act swiftly, delegating efficient, accountable teams, and galvanizing private-public collaboration.
Pre-Covid studies had positioned transport among the high impact, high potential growth sectors that have been earmarked for priority interventions (along with sectors like financing, petroleum-products, metals, and construction). All of these have the potential to induce cascading benefits that ripple throughout the broader economy, but perhaps none more so than transport.
“Inasmuch as it enables the movement of people and goods, the transport industry is a necessary facilitator and catalyst of every other industry at the macro-economic level. It is a crucial determinant of development metrics like GDP, and also prefigures a nation’s overall competitiveness in the global economic arena. Just as other industries rely on transport, transport itself is reliant on a functional, well-maintained infrastructure of roads, railways and ports; both air and sea”, explains Morar.
The role of transport in an economy is double-edged: it at once serves the demand of other sectors, and drives national and industrial competitiveness at the regional, national and global levels, through enhanced process efficiencies and cost improvements.
Within the land-based road- and rail- subsectors, the freight industry is the primary contributor to income, approximately 55% of which is derived from 3 key industries – mining, manufacture, and agriculture.
“Re-energising transport starts with sound governance. We advocate for a Single Transport Economic Regulator (STER), as well as a standalone ports authority and an independent rail regulator. Such structures would provide transparency, impartial oversight, and enhanced competition. In addition to this, we recommend a strong government-enabled model for collaborative networking amongst SMME’s, private companies, and academies or associations”, Morar elaborates.
A seismic shift in economic history, the covid-19 pandemic and its after-effects are ushering in a veritable fourth industrial revolution for the SA transport sector. “We anticipate many more Private-Public Partnerships (PPPs) including collaborations with logistics partners to overcome traditional obstacles, and start to forge more cost-effective, multi-modal transport solutions”, says Morar.View more
VIDEO | 7 Principles for building better cities
TED TALK | PETER CALTHORPE
More than half of the world’s population lives in cities. Another 2.5 billion people are projected to move to urban areas by 2050. The way we build new cities will be at the heart of what matters: climate change, economic vitality, well-being, and connectedness. Peter Calthorpe is planning the cities of the future and advocating for community design that’s focused on human interaction. He shares seven universal principles for solving sprawl and building smarter, more sustainable cities.
This talk was presented at an official TED conference.
ABOUT THE SPEAKER: PETER CALTHORPE
Peter Calthorpe has spread the vision of New Urbanism, a framework for creating sustainable, human-scaled places.
Why you should listen
Peter Calthorpe’s 30-year design practice is informed by the idea that successful places must be diverse in uses and users, scaled to human interaction, and environmentally sustainable.
In the early 1990s, Calthorpe developed the concept of Transit Oriented Development (described in his book The Next American Metropolis: Ecology, Community and the American Dream). This idea is now the foundation of many regional policies and city plans around the world. His 2010 book is Urbanism in the Age of Climate Change. Calthorpe Associates’ work has demonstrated that community design with a focus on sustainability and scale can be adapted throughout the globe. His current work is focused on developing standards of Low Carbon Cities in Beijing, Chongqing, Kunming, Zhuhai, Jinan and other major cities.
“The titles of Peter Calthorpe’s books trace the recent history of urban design in its most vital and prescient manifestations, starting in 1986 with Sustainable Communities followed by The Regional City: Planning for the End of Sprawl and most recently Urbanism in the Age of Climate Change.” — MetropolisView more
Pathways to transformation: The Covid-19 pandemic crisis and emerging lessons for repurposing our cities
Covid-19 has impacted on contemporary society in ways that would not have been contemplated even six months ago. No-one would have considered locking down half the world’s population as remotely feasible in January of this year. Unsurprisingly, much has, and continues to be, written about the current Covid-19 pandemic and its impacts on our lives.
By Llewellyn van Wyk, Infrastructure Policy and Development Analyst, New Zealand
Many of these contributors and writers have also argued that Covid-19 provides a critical moment for societal transformation – an opportunity, as it were, to replace the dysfunctional economic, social, and environmental systems that have accumulated over decades. This collective writing is contributing to the building of a new body of knowledge on how pandemic crisis impacts on our lives, and how governments and people did and can respond to its challenges. The value of these lessons should not be underestimated: never have we had a single pandemic crisis impact on so many people almost simultaneously at this scale. As Jacinda Ardern, the Prime Minister of New Zealand keeps on reminding us, “there is no playbook for this.”
It just may be that after Covid-19, if there is an after (more on this anon), it may well be possible to construct such a playbook.
The opportunity to contribute to such a playbook dawned on me as my mailbox began filling with contributions from writers and thinkers from around the globe. Perhaps among the collective contributions, some lessons could be gleaned that would offer pathways to transformation. It may be argued that trying to create potential lessons from an event that has yet to run its course is premature at best, foolish at worst. After all, a post-Covid-19 could look quite different from what is being currently widely speculated.
Notwithstanding this risk, there seems to me to be a unique opportunity to distill lessons from the many commentaries on the subject especially while passions are still so high. No doubt the learned studies will follow, and these two views – a before and after, spontaneous and considered if you like – will, in and of itself, be enlightening.
Thus, I began a process of curation hoping that these curated insights could help leaders in the public, private, and social sectors overcome the crisis—and remake the future. This has allowed me to draw on some of the wealth of material produced since the outbreak of Covid-19, utilising some of the 300+ articles that came into my inbox. This curated collection represents some of the best I have read; no doubt, there are other excellent contributions that I have probably missed.
What follows is a collection of think-pieces – missives written in the heat of battle from the frontlines – from a wide array of contributors over a period of four months. As to be expected, there is a personal bias in the recording since what enters my email inbox is predominantly invited and firmly grounded in progressive thinking and delimited to placemaking. Given the delimitations of the data collection method (both source and topic bias), I have systematically collected and collated all contributions as they appear daily. From these puzzle pieces, a general picture has emerged as one would expect from the adoption of a grounded theory approach in research. Not surprisingly, many overlaps emerged as well, and they are most likely attributable perhaps to a growing collective awareness and shared philosophies.
What struck me, in the beginning, was the uncertainty surrounding the nature and by implication, the solutions needed to manage the crisis. This reminded me of a scene in the 2011 movie Margin Call. There is a scene in the movie where, at a senior partners meeting called at 4 AM to discuss the potential financial collapse of the company, the CEO, John Tuld (played by Jeremy Irons), following a briefing by a young risk analyst to Tuld on the nature of the problem, replies: “So, what you are telling me is that the music is about to stop, and we are going to be left holding the biggest bag of odorous excrement ever assembled in the history of…..capitalism.” The movie is of course fictitious, although based on the events of the financial crisis of 2007-08 and indirectly referencing the actions of Goldman Sachs at the time. But it is the subsequent dialogue which is of relevance where Tuld sums up the situation as follows, “I’m here for one reason and one reason alone. I’m here to guess what the music might do a week, a month, a year from now. That’s it. Nothing more. I’m standing here tonight I’m afraid that I don’t… hear… a thing. Just…. silence. So, now that we know the music has stopped, what do we do about it?”
We do not know whether Covid-19 has stopped the music or is just slowing it down. It is too early to say. However, the music has elicited a huge amount of commentary on all social media platforms with responses varying from “hoax” to “overreaction” to “mythical moment for humankind” and everything in-between.
In the beginning of the pandemic’s spread out of China, the commentary focused almost exclusively on the nature of the virus itself, and potential threats it posed. Very soon, however, as case numbers increased and nation-wide shutdowns started, the topics covered in the commentaries broadened.
Commentators were quick to seize on the opportunity to use the pandemic as a moment to change our consumption and production patterns. Many argue that the underlying systemic weaknesses in our socio-economic structure create the enabling environment for Covid-19-type crisis to flourish. Similarly, questions are asked about our seeming inability as a specie to think about tomorrow. Despite much finger-pointing at the tardiness with which some countries responded to putting containment measures in place, the overall sentiment is one of hopeful optimism that some good can come out of it.
Changing our consumption and production patterns inevitably means revaluing our relationship with the natural environment and the impacts it causes. This argument is strengthened by early suggestions that the virus spread from a wet seafood market associated with the trade of wildlife. There is significant evidence that links past pandemics to the same source.
Commentators also took the opportunity to draw parallels between fighting climate change, and our response to Covid-19. On this subject, opinion is divided as to whether governments and the electorate for that matter, will connect the dots.
One of the earliest axioms to come out of the sustainable development movement in the 1980s was to “think globally, and to act locally”. This is a timely moment to unpack this notion again in light of the current crisis. The state of national preparedness – or absence thereof – features prominently in this narrative. The state of healthcare and its ability to respond quickly and effectively is perhaps the most poignant question asked, and extensive reviews will need to be done to recalibrate this critical service.
All the above takes us firmly into the study field of human ecology being the interdisciplinary and transdisciplinary study of the relationship between humans, and their natural, social, and built environments. Human ecology theory considers the interactions of humans with their environments as a system. This systemic scrutiny provides an appropriate platform from which evaluate Covid-19 and its broader socio-economic and environmental impacts.
While there is considerable commentary on the Covid-19 impacts and lessons for the social and natural environments, it is the third environment i.e., built environment, and its interaction with the natural and social environments that is my real field of study. While commentaries did emerge on possible lessons and impacts on placemaking, they tended to focus on a priori textbook urban design and planning interventions rather than on what the emerging Covid-19 data i.e., planning commentaries are based on theoretical deduction rather than empirical observation. The empirical observation uses a wide enough lens to encompass all the commentaries and observations made to explore and propose a raft of possible responses capable of enriching while repurposing and futureproofing our built environments.
While they touch on almost all aspects of society some notables include human impact on the natural environment, consumption and production patterns, health care (or lack thereof), infrastructure fragility, and the quality (and absence thereof) of public places. All of these are and will increasingly continue to be severely tested by climate change too. Covid-19, therefore, grants us a unique moment to measure our resilience to forecasted climate change impacts and, if we choose, to recalibrate our adaptation and mitigation instruments.
Over the course of the ensuing months, I will unpack many of the above themes in greater detail and expand on the lessons learned. Without pre-empting the many lessons, there are three standout messages: first, how unprepared governments were (and continue to be) to deal with severe disruptions; second, how fragile many of our systems are; and third, many structural fault lines were already active – Covid-19 has just exposed them.
Now, more than ever, is the opportunity to fix our many broken systems.View more
Infrastructure PPPs can be the future, underpinned by technical excellence
There is a growing realisation that large-scale infrastructure development in Africa will only be achieved through a co-funding arrangement with the private sector – but even then there are plenty of technical hurdles that projects must clear.
Africa clearly needs infrastructure improvements to open doors to trade and create opportunities for economic investment. As the implementing arm for the African Union’s 2063 development strategy, the New Partnership for Africa’s Development (Nepad) focuses on incubating high-impact projects that demonstrate proof-of-concept. These are intended to translate the AU’s strategic development frameworks into national priorities.
The drive for high-impact initiatives has led a few sub-Saharan countries including South Africa, Nigeria, Kenya and Uganda to partner with the private sector on some infrastructure projects. Despite the ample opportunities for public-private partnerships (PPPs) – and their obvious benefits – governments have been slow to drive this agenda.
According to SRK Consulting partner and principal environmental consultant Darryll Killian, this may be the result of prior bad experiences with ill-prepared PPPs or even with less-than-competent PPP project sponsors. However, there are well-proven strategies and lessons that can pave the way for efficient, cost-effective and manageable infrastructure-building.
“Experience shows it is necessary to start small before embarking on larger PPPs. Ensuring a higher risk allocation to the government in the first generation of PPP projects can help to unlock the flow of private capital – as investors and lenders develop enough comfort with the PPP environment of a country,” said Killian.
There is also a range of technical and regulatory risks to all infrastructure projects that need to be well managed, he emphasised, especially with ever-stricter environmental and social regulations.
“Due diligence reviews of infrastructure deals are vital to ensure that there are no fatal flaws and material risks and liabilities. With many financial institutions subscribing to the Equator Principles, risk management has become a key consideration in the funding decision-making process. Funders want to know if there are any issues that can place the project at risk, or pose reputational damage,” said Killian.
They will prioritise proper planning, permitting and cost efficiency in a project – and will examine how the project plans to deal with social licence issues like compensation and resettlement. Climate change and its impact on a project are also on funders’ agendas, as climate change becomes a key cross-cutting issue for proponents of infrastructure projects to address.
To address possible misalignment of a project with funders’ requirements, project champions need to involve funders early in the project development process; it is difficult to achieve bankable feasibility if potential funders are not satisfied with the way that project risks are addressed. Such lack of alignment can disrupt the schedule or even de-rail the whole project.
SRK partner and principal civil engineer, Bruce Engelsman, said that this can be avoided by taking a systematic approach to infrastructural projects.
“This means setting out a clear process through the stages of initiation, feasibility studies, planning, execution, monitoring and control, and closure,” said Engelsman.
Engelsman highlights that planning and budgeting for maintenance are often underestimated. In the initiation stage, the project’s value and feasibility are measured.
He added that this includes assessing the project’s goals, timeline and costs to determine if the projected should be executed.
“Feasibility studies balance the requirements of the project with available resources, ensuring that there is a business case, that risks are adequately catered for and that it makes sense to pursue the project,” said Engelsman.
In addition, funders stress the importance of independent due diligence reviews and reporting, said Steve Bartels, partner and principal engineering technologist at SRK.
“It is vital that third-party experts – who do not have any vested interest in the project – give their professional view on all aspects, to confirm the veracity of the technical studies, business case and plans,” said Bartels.
He argued that Africa certainly has the need and capacity to accelerate its infrastructure development – but this needs a greater commitment to best practice in initiating and pursuing infrastructural projects. Considerable potential remains for leveraging PPPs in doing just that.View more
Pandemic disruptions an opportunity for Africa to reimagine cities
The need for social distancing and better sanitation could leapfrog African city developed into a more sustainable future.
This is according to Duncan Bonnett, Director Market Access & Research at Africa House, and research partner of exhibition organiser Messe Muenchen South Africa, who says that while Africa’s architects and planners have long been pushing for greener, smarter better designed urban spaces, the Covid-19 pandemic may help fast-track moves to better living spaces.
Speaking ahead of the Bauma CONEXPO AFRICA trade show, Bonnett said that the Covid-19 pandemic has caused delays and disruptions across constructions and infrastructure development. However, there are reasons to remain positive about this sector and Africa as a whole.
These, he said, included a new need for the realignment of developments such as commercial and hospitality spaces, the reconfiguration of retail developments and the reimagining of towns and cities.
“We could see redevelopment and remodelling of spaces, the development of new warehousing and logistics hubs as e-commerce really takes off; and the growth of retail distribution infrastructure closer to outlets and consumers,” he says.
He added that there is another opportunity“Another opportunity in the redevelopment of urban spaces in South Africa and the rest of Africa. Bonnet also emphasized that the pandemic has brought to light to maintain safe social distancing and to ensure the safety of water and sanitation for informal settlements and townships.
“This is an opportunity for investors, governments and private sector to reconfigure how Africa lives – reimagining housing, green spaces, sanitation, power, and the work environment to ensure that both urban and rural spaces are resilient to disruption such as pandemics,” Bonnet explains.
The growth of urban areas in sub-Saharan Africa has accelerated in recent years and this growth is expected to pick up over the next 15 years, Bonnett says.
“In the same way as much of Africa leapfrogged telephony progress and went direct to smartphones, we now have an opportunity to develop new urban areas that are sustainable, environmentally friendly and resilient to disruption. This shock to the system could push us in the right direction to develop better integrated, smarter cities,” Bonnet says.
Bonnett says Africa has much to learn from international best practice and pan-African forays into sustainable cities and infrastructure.
“This is the time to have the conversations and stimulate thinking around how we do this. Events like Bauma CONEXPO Africa can play a key role in creating the linkages and getting processes going so that the future-proof, sustainable African city is not just a theoretical concept,” Bonnet says.
Suzette Scheepers, CEO of Messe Muenchen South Africa organisers of Bauma CONEXPO AFRICA, says new approaches, technologies and construction materials can underpin Africa’s efforts to reimagine urban development.
“Despite the challenges brought about by the pandemic, the development will continue, and new opportunities will emerge across the continent. At Bauma CONEXPO AFRICA, thought leaders from around the world and across Africa have an opportunity to assess new approaches and forge new partnerships that can support the development of the African cities of the future,” she says.
Bauma CONEXPO AFRICA, sub-Saharan Africa’s Leading Trade Fair for Construction, Building Material, Mining, Agriculture & Forestry Machines, Machinery and Vehicles, will be staged in Johannesburg from 13 – 16 October 2021. For more information, go to https://www.bcafrica.com/en/View more