Projects on the map
PROJECTS ON THE MAP
An inspection at DeBeers' Venetia Mine in Alldays, South Africa
PHOTO COURTESY OF DE BEERS GROUP
This young democracy has a plan and plenty of projects.
It just needs project practitioners to manage them.
BY MARK GUARINO AND KELLY DIRIE
An oil rig in Table Bay, Cape Town
For a 20-year-old, the economy of democratic South Africa can claim a high maturity. The country has made significant economic strides since the end of apartheid and the beginning of democracy two decades ago—tripling its economic output, halving its inflation and seeing its middle class grow by 10 million people since 1994.
As Africa's largest economy, accounting for 30 percent of sub-Saharan Africa's GDP, South Africa serves as the continent's gateway: It provides outside investors access to Africa's economic resources, cheap labor and growing consumer base. The country's thriving sectors—mining, retail and telecommunications—help maintain its lead over its neighbors.
To secure that lead—and bolster its project landscape—the South African government adopted the National Development Plan in 2012. The plan sets forth a series of steps to reach the goal of eliminating poverty and reducing inequality by 2030.
The National Development Plan aims to generate jobs in a country with an unemployment rate hovering around 25 percent (30 percent including those who no longer search for work) and a youth unemployment rate of 50 percent, according to the International Monetary Fund.
As part of the plan, the South African government is spending R84.3 billion on infrastructure projects, including transport, energy and communications, in 2013-2014. By 2017, it will increase that investment by 7.9 percent a year to R105.8 billion.
The South African government is spending
on infrastructure projects, including transport, energy and communications, in 2013-2014. By 2017, it will increase that investment by 7.9 percent a year to R105.8 billion.
One major project, announced in October 2013, intends to revitalize South Africa's rail industry, providing efficient public transport and spurring job growth. For its R123 billion fleet-renewal program, the Passenger Rail Agency of South Africa will purchase 600 passenger trains between 2015 and 2025 from Alstom, a French energy-solutions and transport company. The R51 billion rail project—the largest infrastructure contract ever awarded in South Africa and the largest-ever order for Alstom—seeks to reduce travel times to job-heavy urban centers and encourage outside investment.
“The big potential challenge is human resource capacity to deliver what is a very ambitious infrastructure rollout plan under the National Development Plan.”
—André Pottas, Deloitte, Johannesburg, South Africa
While the National Development Plan has given the green light to infrastructure projects, South Africa needs not just better infrastructure, analysts say, but better social infrastructure, such as healthcare and education.
“Investments such as roads and ports are clearly happening, but the second part of South Africa's infrastructure needs is driven by welfare-driven infrastructure projects and trying to assure the population of South Africa it is providing the poor access to housing, energy and water,” says Haroon Bhorat, PhD, professor of economics and director of the Development Policy Research Unit at the University of Cape Town, Cape Town.
The Passenger Rail Agency of South Africa will purchase 600 passenger trains between 2015 and 2025.
IMAGE COURTESY OF THE PASSENGER RAIL AGENCY OF SOUTH AFRICA
The Presidential Infrastructure Coordinating Commission's National Infrastructure Plan, adopted by the South African government in 2012, identified 18 strategic integrated projects, among them social infrastructure initiatives such as six major hospital projects and two new universities.
If South Africa invests in an educated, skilled workforce, the projects will follow—especially in the country's IT sector, the largest on the African continent. “High-tech jobs only go to the places where you have skilled people and the rule of law prevails and is respected,” says John Mukum Mbaku, PhD, a non-resident senior research fellow at the Brookings Institution's Africa Growth Initiative, Washington, D.C., USA and an economics professor at Weber State University, Ogden, Utah, USA.
Yet South African project sponsors will have to counter the perception that, in their country, the rule of law does not always prevail. The Corruption Perceptions Index 2013, released by the non-governmental organization Transparency International, gave South Africa a score of 42—with 0 indicating the country is perceived as highly corrupt and 100 indicating it's perceived as very clean.
ANSWERING THE CALL
In the face of a yawning wealth gap and strikes in the mining and automotive sectors that have stunted the overall growth of exports, the National Development Plan's large-scale projects are “precisely what South Africa needs to become globally competitive and achieve higher growth rates,” says Dr. Mukum Mbaku.
Getting Better We asked South African project practitioners: What
“Stakeholder engagement as well as management of stakeholder expectations. The key to success for any project is proper communication to the correct audience.”
—Gerrit Benade, project manager, A1L Realizations, Johannesburg
“Stakeholder management. It has an influence on the success of the project in the bigger ecosystem or organization.”
—Esau Roberths, PMP, program manager, Fundamo, a Visa company, cape Town
But those projects need project leaders. Developing new leaders is the primary concern for 58 percent of top management in South Africa, according to a 2013 Deloitte survey, while 40 percent cite sustaining employees and 35 percent point to recruiting workers with hard-to-find skill sets.
“Qualified and experienced project managers are in short supply in South Africa, particularly in the public sector, and this does impact the timeline for project implementation and the ability of the public sector to control project outcomes,” says André Pottas, infrastructure advisory leader for Africa, Deloitte, a PMI Global Executive Council member, Johannesburg, South Africa. “The big potential challenge is human resource capacity to deliver what is a very ambitious infrastructure rollout plan under the National Development Plan.”
South Africa would benefit not only from more project managers but from a more mature project management culture. “In terms of managing standalone projects, South Africa seems to be doing fairly well,” says J-P Labuschagne, associate director, Deloitte, Johannesburg. “However, the program approach to managing multiple projects needs improvement if South Africa is to achieve its ambitious infrastructure roll-out plan.”
“The program approach to managing multiple projects needs improvement if South Africa is to achieve its ambitious infrastructure roll-out plan.”
—J-P Labuschagne, Deloitte, Johannesburg
Project practitioners in South Africa echo that sentiment. Brenda Taylor, PMI-SP, PMP, program manager, Davis & Dean, Johannesburg, cites a lack of strategically aligned project management offices (PMOs): “PMOs' link to strategic objectives is unclear,” she says. Ms. Taylor says project management is very mature in the IT sector but less so in sectors such as construction and engineering.
Roy Lee, PMP, project manager, Liberty Life, Johannesburg, likewise sees opportunity for South African organizations that value mature project management practices: “There are a lot of good project managers who are certified in South Africa, but most companies have an immature project management approach.” As a result, he says, “most of the benefits derived from project management principles are not put into practice.”
For South Africa, that means a pressing need—and opportunity—for greater project management maturity. PM
practices and skills should project managers in South Africa focus on?
“Risk management can get overlooked or treated as a formality in IT environments. Sometimes risk registers are kept but not seen as critical.”
—Brenda Taylor, PMI-Sp, PMP, program manager, Davis & Dean, Johannesburg
“Cost and ROI in planning and execution.”
—Hennie Burger, PMP, project manager, ABSA, Johannesburg
DURBAN DIG-OUT PORT
Schedule: Launching 2016, lasting up to 40 years
Budget: R75-100 billion
One of the busiest ports in South Africa, Durban can accommodate 2.7 million containers a year—but a new port would increase its capacity to more than 9 million. The Durban Dig-Out Port is part of the Presidential Infrastructure coordinating commission's 18 strategic integrated projects, which include social and economic infrastructure across all nine provinces. If the project passes a feasibility test later this year and secures private-public funding, the team plans to start construction in 2016. The new port would be the biggest in the southern Hemisphere.
FIRST AUTOMOBILE WORKS
Location: Port Elizabeth
Schedule: February 2012 to early 2014
Budget: R600 million
When the First automobile Works (FAW) truck-assembly plant begins production this year, it should produce 5,000 commercial vehicles annually. If it meets expectations, FAW plans to start construction on the second phase of the project next year—a passenger-vehicle plant that will have the capacity to produce 30,000 units. Both plants will serve the south African and other African markets, and potentially export vehicles to Australia.
BOSHOF SOLAR PARK
Schedule: May 2013 to late 2014
Budget: R2.4 billion
As part of south Africa's renewable energy program, Boshof solar Park, a 60-megawatt solar photovoltaic plant, received fast-track implementation. As a result, it should connect to the national grid at the end of the year. Global solar energy services and technology provider SunEdison entered a joint venture with Basil Read Matomo and Isolux Ingeniería for the design, construction and maintenance of the facility.
W E R Seven notable initiatives across the country
THE WORLD'S FIRST DIGITAL LASER
Schedule: 2010 to 2013
Last year, a team of South African scientists successfully created the world's first digital laser—a game-changer in the field of photonics, or the science of light technology. This disruptive tech could have a big impact on medicine, manufacturing, communications and electronic devices. The lead researcher, Andrew Forbes, PhD, of the Council for scientific and Industrial Research, says his team relied on outside experts in related fields. “That is one of the things that people forget in projects—that there's a world full of experts and you don't have to be an expert in everything,” Dr. Forbes says. “You just have to bring that knowledge into the team.”
SASOL POWER PLANT
Schedule: July 2011 to December 2012
Budget: R1.5 billion
The Sasol Power Plant, South Africa's first gas-engine power plant, can produce 140 megawatts—enough to power 200,000 homes. To manage the project, Sasol New Energy contracted Finland-based Wärtsilä, which has developed more than 450 power plants across Africa. The project team met the challenges of operating at a high altitude and decreasing carbon emissions, while dealing with an unreliable national grid. The team completed the plant three months ahead of schedule and 20 percent under budget.
VENETIA UNDERGROUND MINE PROJECT Location: Alldays
Schedule: October 2013 to 2021
Budget: R20 billion
In 2005, DeBeers' Venetia Mine, one of South Africa's leading diamond producers, was expected to have a life span of just 20 more years. By converting the open pit to an underground mine, the Venetia Underground Mine Project will extend the mine's life to 2042. DeBeers plans to begin production in the underground mine in 2021; meanwhile, the open pit will remain operable. During its prolonged lifetime, the mine is expected to produce 96 million carats.
ZENDAI'S URBAN DEVELOPMENT PROJECT IN JOHANNESBURG
Schedule: 2013 to 2028
Budget: R80 billion
Shanghai Zendai Property plans to build what it calls the future capital of Africa in the Johannesburg suburb of Modderfontein. Within close proximity to Johannesburg's O.R. Tambo International airport, the development will serve as a hub for chinese firms investing in sub-Saharan Africa. The development will include business centers, a residential area, hotels, shopping centers and an African culture theme park.
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MARCH 2014 PM NETWORK