The 2016 financial year saw a general decline in market capitalisation performance, with seven of the nine traditional leaders in the construction sector showing a decrease in market capitalisation, including the old powerhouse Murray & Roberts, according to reports. On the flip side, WBHO and Calgro showed increases in their market capitalisations.
It will certainly be fascinating to see how much action is behind President Zuma’s ambitious plans to increase infrastructure development, which is never a bad thing to keep any economy ticking.
Engineers are the lifeblood of any construction boom and without the necessary economic growth and investor confidence, some qualified engineers are left on the sidelines without a steady stream of work.
But the challenges that today’s engineers face are not dissimilar to that of yesteryear. To find out more, I tracked down some of the finest minds from the industry to unpack the state of the engineering nation.
Old struggle versus new struggle
We start off with the passionate President of the Consulting Engineers South Africa (CESA), Lynne Pretorius, who reflects on some of the challenges black engineers face, in what has until recently been a white dominated domain. She holds a BSc Engineering (Civil) and M. Engineering (Transportation) from the University of Cape Town and has worked in the engineering industry for many years since graduating in 1993.
“Since the dawn of the new democracy in 1994, South Africa has been facing significant challenges to transform our society, crippled in so many ways by apartheid. In the technical professions and the consulting engineering profession specifically, these challenges also manifested themselves in many ways, especially due to the poor quality of education for black learners,” says Pretorius.
“Today, more than 20 years later, we are facing some of the same challenges and some new challenges. Questions are being raised about the effectiveness of BBBEE policies, the quality of education and the Fees Must Fall Campaign has forced many to recognise and acknowledge the challenges that are being faced by many students, including engineering students, at tertiary institutions. It has also become apparent this is no longer a matter of black disadvantage alone, but a matter of poverty versus privilege and the direct link to access to quality education.
“Within the built environment profession, including consulting engineering, similar challenges are experienced. The BBBEE policies also gave rise to the phenomenon of “fronting” and questions are being raised about the effectiveness of the BBBEE scorecard in realising transformation objectives,” she says.
Bridging the gap
Another heavyweight of South Africa’s engineering fraternity, Caesar Mtetwa, President of the National Society of Black Engineers (NSBE) echoes Pretorius’ critic of the industry, post-apartheid. The University of KZN graduate has over 20 years experience in engineering, while currently serving as General Manager at Transnet Freight Rail.
“The challenges facing the black engineers in 2017 will not be that far or different from the ones they faced 20 years ago, which are structural and systemic, due to our historical past. Until today, black engineers and technicians still struggle to get the employment that affords them the correct training and when they are employed, they are not afforded the correct training that enables them to register. We have done a lot of work towards transforming the Engineering Council of South Africa (ECSA) to enable the fair and just treatment of all engineers.
“Secondly, the Public Service has not been fully professionalised yet. We, as NSBE, made a clear, passionate plea to the President and the Minister of Public Works that public works and the municipalities must have engineers and, most importantly, registered engineers with a professional engineering status. It is, therefore, our view that, due to the slow implementation of the professionalisation, black engineers will continue to struggle to get opportunities,” says Mtetwa.
Lack of confidence
Meanwhile, the PPS Graduate Professional Index was conducted among 400 South African engineers and indicated that only 4% of the respondents believe that the South African government is effectively delivering on its promises on infrastructure spend.
Vaughan Rimbault, CEO of the South African Institution of Mechanical Engineering (SAIMechE), says that we need proactive collaboration between the government and engineering professionals to counter these issues.
“The government is the biggest potential client for any engineering company, so when massive construction projects are rolled out, it is vital that engineers with the right engineering skills are chosen to do these projects. Improved collaboration between the government and engineering associations will facilitate communication and, in turn, encourage support from these professionals to have more faith in the government’s infrastructure expenditure.”
Rimbault states that the government also has a responsibility to employ local South African businesses to handle these big projects rather than employing skills from overseas. “There is an abundance of engineering talent in South Africa that should be given the opportunities to work with the State.”
Engineers not used in important areas
Another similar complaint is levied at the municipal system, which, according to Mtetwa, is not making enough use of the essential services that engineers offer—being experts in the use of technology in the design, construction, assessment and maintenance of the built environment.
“As a way of example, there are 278 municipalities in South Africa, 159 do not have civil engineers and of the remaining 119 that do have civil engineering posts, some 40% of those posts are vacant. But when you check how many engineers or black engineering firms are without work, it is chalk and cheese. Therefore, as NSBE, we believe the government must fast-track the professionalisation of the public service in order to improve service delivery,” says Mtetwa.
Profile within the public sector
However, some findings of studies undertaken by Dr Allyson Lawless indicate that significant changes have happened in the public sector since 2005. She indicated that the number of black municipal engineering staff has increased significantly in the period from 2005 to 2015.
In addition, the age profile also reflects that the number of senior engineers (primarily white) has reduced significantly. In almost 50% of municipalities, the most senior civil person is 41 years of age or younger and in 17% of municipalities, 34 years of age or younger. Also, her analysis indicates that the number of civil engineers and the number of professionally registered staff has reduced.
Women in engineering
“The BECS survey statistics show that the percentage of women engineering staff employed at CESA members amounts to about 4-6% of total consulting engineering professionals, with black women comprising about 12% of this group. In addition, ECSA’s research also shows a higher presence of women in the age group younger than 38 years,” says Pretorius.
“The recent CESA Bi-annual Economic and Capacity Survey (BECS) results indicated that the CESA membership currently comprises 53%, white staff. When only professional engineers are considered, this category comprises 84%, white staff. The employment breakdown indicates that black people are typically employed lower down on the professional hierarchy as technicians, technical assistants and laboratory/survey assistants.”
The age profile of ECSA engineering professionals also shows a higher number of black engineering professionals in the age group 22-38 years. Furthermore, 55% of engineers that responded to the survey older than 55 years stated that they will retire within five years, but 91% expressed their intention to still work part-time. To find out more about the experiences of young engineers making their mark in the industry, I asked Andile Nqandela, Managing Director of Brimis Engineering about some of the challenges that smaller start-up engineering companies face. Brimis Engineering has been operating in the Middleburg area since 2014 and is 100% black owned.
“There have been some challenges in terms of transformation, where we battle to get access into the mainstream of business. As a small business, you get asked to do things that are more for established companies, like ISO 9001 certification and requirements for large equipment. So you need to improvise with whatever equipment you have. People expect you to have a full workforce when you may only need them on a contract basis when there is work.
“But, eventually, when you realise what it takes to be an entrepreneur, you don’t sit and do nothing about it. That is why we are approaching our governmental agencies that help small businesses. Now I have a sponsor for implementing ISO 9001 and approached the DTI for networking assistance. We are never taught how to network. I’ve been taught that you need to research the person you want to meet, know what they do, so you can relate to them when you meet,” says Nqandela.
“The challenges facing the black engineers in 2017 will not be that far or different from the ones they faced 20 years ago due to our historical past”
Employment of engineers
However, it’s not all peaches and cream for university graduates, who often struggle to find a job, according to the no-nonsense Mtetwa.
“We have a number of unemployed engineering graduates in the country, why is that when the skill is in such high demand? There is a general ignorance of who an engineer is and what an engineer does in South Africa. Traditional engineering leadership roles are often given to non-engineers in the mistaken assumption that leadership roles are generic in nature. Let me illustrate the point further, the bank CEOs are invariably chartered accountants or economists, the Heads of hospitals are invariably medical doctors, Heads of auditing firms are strictly chartered accountants, however, when it comes to manufacturing, logistics and technology sectors that are often led by engineers worldwide, it does not happen in South Africa on the scale required.
“We will continue to lag behind in maximising the engineering potential in the country; consequently, our best engineers leave us in numbers for greener pastures abroad or move to financial services for better salaries. This is a great loss to SA’s potential of starting up a Silicon Valley like in the USA and India. Ignorance of what an engineer does is the biggest ill,” he says.
Sadly, in recent years, mentoring has declined in many of South Africa’s industries, with cost-cutting and political uncertainty hindering further investment into human capital development on a practical level.
“Considering ECSAs statistics, as well as the findings of the recent study of Dr Lawless, it is apparent that the number of experienced engineers is reducing. This has significant implications for the mentoring and development of young engineering staff in the private and public sector alike. The lack of mentoring opportunities was also mentioned as one of the reasons for the relatively low number of black engineers. It is proposed that CESA actively starts developing mentoring programmes,” says Pretorius.
Those views are largely shared by Mtetwa. “We, as NSBE, have observed the growth of reluctance by industry to give practical experience to students to attain qualifications and universities not making a public case about this retrogressive behaviour by industry. The overemphasis of cost-effectiveness by industry when responding to employing students for practical experience is a glaring hypocrisy because the same industry, day in, day out, complains of the inadequacy of engineering skills, yet they don’t act upon the call to increase the number of engineering graduates. Even after graduating with an engineering qualification, the rigour to convert potential to full proficiency is not as wildly chased as it was in the 80s.”
The government’s infrastructure carrot
The government is talking about spending more money on infrastructure development, with demand in key areas. Will this be enough to get the industry out of the shade? Only time will tell. Mtetwa goes on to highlight the sectors that need the most spend, “The main government infrastructure programme runs into billions and the concentration has been on big items like electrical power; more specifically around renewable energy (power). Whilst the current situation from a supply and demand perspective has stabilised; at NSBE, we believe this is only temporary. This has been due to the fact that the economy has been benign and, hence, the low consumption. The outlook should be for a 50-year time horizon and this is where the concept of clean energy and extra capacity comes in.”
Not one to shy away from the important matters of the day, Mtetwa tackles the hot potato of the nuclear debate, and where engineers would fit in.
“The nuclear programme is one that has a huge potential for the country and engineers in particular. The other forms of clean energy programmes (wind, solar et cetera) are well and good but they are, at best, sporadic in terms of energy supply. Nuclear has a long-term impact and is extremely reliable. The country, through Eskom’s Koeberg nuclear power station, has demonstrated that it can handle the technology without problems. The nuclear programme also opens up a space for engineers to master the nuclear space. The shortcoming, however, is that the country is not planning ahead in terms of already empowering engineers or grooming them for this programme.
“NSBE is of the view that to ensure the country’s engineers benefit from this initiative, already by now thousands of talented students should be deployed to the best universities in the nuclear space so that by the time the programme is enrolled, there is adequate capacity for the country; or else we will once again rely on expatriates to execute the programme,” says Mtetwa.
Engineering as a profession has been turned on its head, with countless improvements in software and hardware capabilities, giving the engineer of today carte blanch to create masterpieces.
“Successful technology companies at Silicon Valley in California give access to global data, which was a reserve for state presidents and kings before, that provided chauffeur services to ordinary people at the click of a button and heavily relied on engineers for the creation and production of their products.
“Engineers, in nature, are primarily schooled, trained and moulded to create, seek and adapt to new technologies. The ease of accessing data these days has made the life of an engineer very easy, the new concepts that would have been tested with sampled data before are now accurately tested to conclusion with heightened accuracy owing to ease of data mining techniques,” says Mtetwa.
But it’s not all doom and gloom for Mtetwa, who plots his outlook for the rest of year, with hopefully the worst of the recession behind us.
“The South African Construction Industry order book has been under pressure since 2010. Following the findings of the Competition Commission with respect to price fixing and corruption in the industry, we can see some positive developments on the transformation front.
“The industry’s old modus operandi is changing, with more emphasis on radical transformation and development of black-owned companies. The large-scale infrastructure projects announced by the president in the 2017 SONA should provide more opportunities for the industry in the new year. We can also see huge opportunities coming up in the African continent, with multi-billion US dollar railway projects in East Africa.
“To this end, we strongly believe there’s a positive outlook in 2017 for SA’s construction companies who have the risk appetite and a genuine transformation agenda to venture into the African continent and compete on a global scale,” he concludes.