Presentation to the Parliamentary Appropriations Committee

1. Presentation to the Parliamentary Appropriations Committee 18 May 2018

2. CONTENTS • Introduction to CESA • Key Objectives of the Presidential theme for 2018 • Key Infrastructure Challenges facing SA • Proposals on the way forward • National Treasury (SIPDM)

3. Consulting Engineers South Africa (CESA)www.cesa.co.za Voluntary Industry Association 65 years in existence 560 Member Companies Consulting Engineers, not Building Contractors Consulting Engineers not Management Consultants

4. KEY OBJECTIVES OF PRESIDENTIAL THEME FOR 2018 Effective Ethical Leadership Transforming the hearts and minds of our people Embracing the new world of Digitisation Industry integration and working collaboratively Working with clients in addressing Corruption

5. KEY INFRASTRUCTURE CHALLENGES FACING SA • Lack of Technical skills and capacity in Public Sector (Role of the Client). • Generic Approach to Procurement • Feast or Famine phenomenon in Construction industry - inconsistency of workload • Lack of planning in advance of need • Inadequate regulation i.r.o Professional Registration with Engineering Council of South Africa (ECSA).

6. Infrastructure Investment(Source : CESA BECS 2017)

7. “ROLE OF THE CLIENT”

8. Infrastructure Assets Does it make sense to procure the smallest cost component on a lowest cost basis, when you expect such professionals to provide solutions that save you money on the larger two cost components ?

9. National Planning Commission • National Planning Commission (NPC) identified a number of shortcomings in the SCM system, namely: • the “emphasis on compliance by box-ticking makes the system costly, burdensome, ineffective and prone to fraud”, and • “procurement systems tend to focus on procedural compliance rather than value for money, and place an excessive burden on weak support functions.” • The National Planning Commission’s National Development Plan 2030: Our future – make it work suggests that the design of a procurement system that is better able to deliver value for money, while minimising the scope for corruption needs: • differentiate between the different types of procurement which pose different challenges and require different skills sets • adopt a strategic approach to procurement above the project level to balance competing objectives and priorities rather than viewing each project in isolation • build relationships of trust and understanding with the private sector • develop professional supply chain management capacity through training and accreditation • incorporate oversight functions to assess value for money National Treasury Standard for Infrastructure Procurement and Delivery Management designed around these principles

10. INFRASTRUCTURE DELIVERY MANAGEMENT

11. PROPOSALS ON THE WAY FORWARD • Competent Technical Skills • Independent Infrastructure Advisory team to the Presidency • National Treasury and Auditor General offices - Infrastructure Departments • Capacity within Delivery departments as Client Team, Delivery team, Assurance Team • Ensure that all SOEs, National and Provincial departments have full understanding and capacity to implement SIPDM • Change Procurement of Professional Services to consider “Value for Money” instead of “Lowest cost” • Move to a system of framework contracts with more quality based selection.

12. PROPOSALS ON THE WAY FORWARD (cont.) • Get collaboration of Private Sector (VA’s) and ECSA (Statutory Body) to be reinstated such that collective responsibility is taken for Engineering skills in our industry • Develop “Marshall Plan” around Housing, Water or Energy that can be used to re-invigorate economy, create employment and drive growth • Ongoing open, integrity based dialogue between Infrastructure roleplayers in Public & Private sector – focused on optimising Infrastructure Investment spend;

13. IN CONCLUSION OUR