Alternative Procurement: Integrated

1. Alternative Procurement: Integrated Management of Public Infrastructure

2. CONTENTS • Conference topics • Background • Vision/Mission • Product • Deliverables • Organizational structure • Challenges • Implementation team

3. CONFERENCE TOPICS • Small Enterprise Development as Economic Imperative: Proven • SANRAL - How Enterprise Development Models evolve to suit specific sectors: Building of non-complex infrastructure • Engaging small enterprise in the delivery of construction works: why and how: As per SSI Mafuri model • Separating Small Enterprise Development from Job creation: Important to achieve the required objectives • SAIBL - A Case for supplier diversity • A snap shot of opportunities with small businesses in the construction sector: Non-complex infrastructure • IDC - National Imperative of SED in Infrastructure Development rollout: Provision of bridging finance

4. BACKGROUND (1) THE NEED: • Various types of infrastructure required: • Urgently / On time • At appropriate level of quality • Using emerging contractors • Creation of an enabling environment for emerging contractors to prosper

5. BACKGROUND (2) PROBLEM STATEMENT • Lack of economic development • At entrepreneurial (one-man) level • At business level • At lower income level • Lack of capacity/capability to implement (continuous)

6. VISION / MISSION “To provide a solution for accelerated construction and management of public infrastructure within the imperatives of the government mandate and objectives” SSI Mafuri – June 2006 “Part of government’s investment in the economy and in the people of South Africa is the massive expansion of public works. This will be linked to the infrastructure programme and meeting social needs with creches, shools and others” and “in a renewed focus on service delivery, he warned civil servants that the era of hard work has begun” President Jacob Zuma – May 2009

7. PRODUCT UNIQUENESS (1) • All inclusive management function that consolidates all essential elements in the establishment/construction of public infrastructure • Professional technical services • Central procurement of materials/services • Identification of emerging contractors • Own bridging finance

8. UNIQUE DELIVERABLE (1) • Delivery of public infrastructure with emerging contractors whilst providing managerial and financial support to overcome historical and practical disadvantages • Higher CIDB grading for contractors through incubation of Black Construction companies • Community participation, also through labour provided • Projects are completed as per agreed programme and at appropriate level of quality • Public infrastructure fit for purpose

9. UNIQUE DELIVERABLE (2) • Single implementation agent: Provides central administration: - Invoicing from a single source, allowing for timely payments and material procurement. • Youth involvement/development through internship in professional construction careers: - technicians, engineers, quantity surveyors and architects for future projects. • Cost Benefits: - The more schools, the lesser the overheads whilst maintaining the benefits

10. IMPLEMENTATION MODEL(S) • Design and build approach where the SSI/Mafuri executes all the work; • Design and Engineering work by SSI/Mafuri; • Project Management by SSI/Mafuri; • Outsource construction to contractors with proven capabilities; • Involvement of local community to share the economic value of the project; • Subcontract as much as feasible; • Employ labour from local community where feasible.

11. AVAILABLE RESOURCES • Existing professional team. • Credit facilities with major building suppliers to the value of R20 million. • Expert administrative staff, including social facilitation resources. • Experienced and trained black contractors. • Backup from multinational partners – SSI & DHV. • Commercial expertise and experienced visionary leadership - (Mafuri & Associates).

12. DELIVERABLE: MINIMUM STANDARDS • The model will not compromise QUALITY • To ensure infrastructure to community COMPLETION TIMES cannot be compromised • The projects will be run on COMMERCIAL basis • Utilization of emerging contractors and involvement of communities

13. Overall Project Manager Programme Manager & Secr. Support Procurement & Financial Administration • Contractors Support • training & mentoring on: • Project Management • Materials Procurement • Financials / Admin • Technical Quality • Community Facilitation • Design / Specialist • Engineers • Quantity Surveyors • Quality Monitoring As per Project Manager (1) Area Project Manager (2) As per Project Manager (3) Sub Contractor 1 Sub Contractor 2……..6 Sub Contractor 7……….8 Sub Contractor 9………...15 Sub Contractor 16 Site Manager/General Foreman/Store man Emerging Contractor Site Manager • Admin Support: • Storeman • Time Clerk etc. Foreman (1) Foreman (2) Contracting Workforce SSI MAFURI Organogram 8 x Construction Managers

14. CHALLENGES • Unrealistic demands by local community e.g. where critical skills are lacking in the community; • Level of training required; • Role clarity of the various community structures; • Political dissatisfaction spill-over's: • Apparent lack of delivery of other services; • Potential tension due to exclusion of other political structures. • Correct selection of emerging sub-contractors

15. POTENTIAL PROJECTS WITH: • Government departments: Local, Provincial and National • Relatively simple construction projects • Refurbishment projects • Maintenance projects • Niche market where neither established contractors nor small individual contractors can deliver

16. EXAMPLES OF REQUIRED INFRASTRUCTURE • Schools in Gauteng, KZN, NW, Limpopo, etc. • Fresh produce facilities throughout the country • Community Clinics • Houses • Basic water and sanitation infrastructure • Basic road infrastructure • Maintenance on the above

17. MEETING the COMMON GOAL EXTERNAL GOAL: DELIVERY TOWARDS CLIENT: • On time delivery of public infrastructure • Utilizing emerging contractors with the aim to improve their CIDB rating • Community participation

18. IMPLEMENTATION TEAM • SSI/Mafuri: • Mafuri Project Management Agents: a black owned project management practice • SSI: a multi-disciplinary group of companies • Other partners: • Quantity surveyors • Architects • Local black owned or emerging construction companies

19. IMPLEMENTATION AGENTS MAFURI (Areas of expertise) • Professional service providers • Project managers • Procurement of bulk building material • Financial Management • Training and skills development • Community facilitation • Business development and networking, maintaining relationships External professional services • QS’s (as required) • Architects (as required)

20. IMPLEMENTATION AGENTS SSI (Areas of expertise) • Professional service providers • Overall Project Management • Construction Management • Engineering services and Quality monitoring • Facility Management • QS services • Architectural services 3. Materials Supplier(s): Cashbuild, Massmart or other preferred supplier 4. Emerging construction companies • Identify and screen credible construction companies from the local black communities and register as alliance partners 5. Strategic alliance with financial partner e.g IDC, ABSA

21. CONTACT DETAILS Mr. BM Magabe Postal Address: Postnet Suite 168 Private Bag X9924 Sandton, 2146 Tel: +27 (11) 883 0659 Fax:+27 (11) 883 0668 E-mail:mbmagabe@mafuri.co.za Cell: 082 323 3438 Mr. SF vd Linde Postal Address: P O Box 25302 Monument Park 0105 Tel: +27 (12) 367 5811 Fax:+27 (12) 367 5890 E-mail: sfvdl@ssi.co.za Cell: 0825653839

22. Thank You