TRANSFORMATION OF THE BUILT ENVIRONMENT PROFESSIONS

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1 TRANSFORMATION OF THE BUILT ENVIRONMENT PROFESSIONS Ms Gugu Mazibuko CEO; CBE 22 October

2 Mandate of the CBE The CBE is a statutory entity established by CBE Act 43 of 2000 oversees and coordinate the activities of the 6 professional councils, viz. engineering, architecture, quantity surveying, project and construction management, property valuation and landscape architecture Mandated to: Promote & protect the interests of the public in the built environment Promote & maintain a sustainable built environment &natural environment Promote ongoing human resource development in the built environment Facilitate the participation of BE professions in integrated development within the context of national goals Promote appropriate standards of health and safety and environmental protection within the built environment Promote sound governance of BE professions Promote liaison in the field of training in the republic and elsewhere Serve as a platform where BE professions can discuss relevant issues Ensure uniform application of norms and standards set by councils for professions throughout the built environment 2

3 CONCEPTUALISATION PROJECT DESIGN CONSTRUCTION KEY BE DESIGN PROFESSIONS AND THE STAGES OF THE CONSTRUCTION PROCESS CBE policy space, regulate BEPs who conceptualise and design infrastructure to protect the public Project inception STAGE 1 STAGE 2 Project concept and viability BE Professional Consulting Services Companies Architect Quantity Surveyor Structural Engineer Civil Engineer Mechanical Engineer Electrical Engineer Project Manager Project design development STAGE 3 BE Professional Consulting Services Companies Architect Landscape Architect Quantity Surveyor Project Manager Structural Engineer Civil Engineer Mechanical Engineer STAGE 4 Project documentati on and procurement CIDB policy space, regulate contractors who build infrastructure to protect the public Construction STAGE 5 Contractors Project Manager Construction Manager Architect Landscape Architect Quantity Surveyor Project Manager Structural Engineer Civil Engineer Mechanical Engineer STAGE 6 Project close-out OPERATIONS AND MAINTANANCE CBE AND CIDP POLICY SPACE 3

4 KEY PILLARS AND DRIVERS OF TRANSFORMATION IN THE BUILT ENVIRONMENT Skills development Government projects, policies and legislation Industry-wide factors Cyclicality of the construction industry. Increased regulation and legislation. Sustainable Development - environment and energy impact assessment. Urbanisation and need for housing and services. Increased need for job creation and job quality Globalisation and internationalisation of operations. Other industry factors. 4

5 LAYERED TRANSFORMATION AGENDA FOR BUILT ENVIRONMENT PROFESSIONS 5

6 Skills supply constraints Problems with an adequate supply of maths and science graduates. Throughput rate of graduates is around 30% in record time and 66% in 5 years Attractiveness of the BE professions which are perceived as dirty, dangerous and male dominated. Loss of BE professions to other economic sectors; finance and consulting. Emigration recently accentuated by internationalisation of BE firms. Cyclical nature of the construction industry leads to loss of BE skills in times of economic downturns which leads to reduced demand for BE services and skills. Public service conditions of employment and image issues. 6

7 Key Skills Issues Skills inequalities: only 10% of all school learners pass matric with a maths or science pass of 30% or more only around 8,3% of Africans currently have a degree, diploma or NTC qualification Graduate throughput: graduation within 5 years on a 4-year degree: black: 23% white: 55% 7

8 Education Matric Results Public Schools Education level 2011 % of Total who started school in 2000 % of who passed matric Started School 12 years earlier Writing matric Passing matric Receiving university endorsement Receiving technology endorsement Passing part-time matric Passing with maths > 30% Passing with science > 30% Source: BMI-BRSCU, Econometrix, Stats SA 8

9 Education Inequality in Education; Portion of over 20s per Population Group (%) Qualification African Coloured Indian White Up to Grade Grade 8 to Grade 11 to Degree / Diploma / NTC Degree / Diploma / NTC %Change from ,7% Source: Stats SA General Household Survey 1,6% 4,7% 3,3% 9

10 SKILLS SUPPLY PICTURE IN SA Aggregate racial & gender demographics in the 6 professions (professionals + candidates) Racial breakdown on the professions White African Coloured Indian/Asian Other 2% 3% 7% 25% 63% MALE 83% FEMALE: 17% TOTAL NUMBER OF REGISTERED PROFESSIONALS AND CANDIDATES =

11 Statistics : Race and Gender Profile of Registered Professionals per Council ECSA African White Indian Coloured Other Total Female. 48% 15% 4% 33% 12% Male 8% 84% 6% 2% 92% Total 13% 79% 6% 2% 100% SACAP African White Indian Coloured Other Total Female 4% 74% 5% 4% 13% 20% Male 13% 58% 7% 8% 15% 80% Total 11% 61% 6% 7% 15% 100% SACLAP African White Indian Coloured Other Total Female - 45% 2% % Male - 55% 0% % Total - 99.% 1% % SACPVP African White Indian Coloured Other Total Female 18% 73% 4% 5% 15% Male 8% 87% 3% 2% 85% Total 9% 85% 3% 3% - 100% SACPCMP African White Indian Coloured Other Total Female 57% 33% 6% 4% 4% Male 9% 84% 4% 3% 96% Total 11% 82% 4% 3% - 100% SACQSP African White Indian Coloured Other Total Female Male Total GRAND 24% 69% 6% 1% 15% 15% 78% 6% 1% 85% 16% 76% 6% 1% - 100% TOTAL 10% 80% 4% 3% 3% 100% 11

12 CBE s Skills Pipeline Intervention Proposal 24 yrs 27 yrs Government Parastatals Private Sector 18 yrs 15 yrs Push Strategy Intermediate Strategy Pull Strategy School System Matriculate Graduate Candidacy Professional Life CBE 6 Councils in BE Exit Exit Exit Exit 12

13 SKILLS DEVELOPMENT INITIATIVES 1. School Level Initiatives Career Awareness Initiatives videos to increase footprint & reach Maths & Science support to schools partnering with already successful entities GirlEng excellence in Maths & Science already supporting 2. Tertiary Level Bursary scheme centralised & formulating comprehensive student support program Interaction with Academic Institutions : Research Partnerships programmes & input to curriculum(labour intensive construction; health & safety; green agenda) 3. Recent Graduates/Candidates Task Team established by CBE with Engineers, Archit, QSs, Proj Man on Structured & Accredited Candidacy Programme to accelerate professional registration. CETA has approached CBE to become a Dev Quality Partner(DQP) Developer of and quality assurer of BE Qualifications as well as an Education and Training Quality Assurer(ETQA) for quality assurance of mentors, workplaces, CPD programmes etc. 4. CPD Programmes 6 Professional Councils and Voluntary Associations. 5. Public Sector Technical Skills Development Initiatives DPW internal technical skills development initiatives national & provincial Public Sector Engineers Forum then Built Environment Forums MISA (Municipal Infrastructure Support Agency) technical skills dev initiatives Participation in Skills Plan-President Infrastruct Projects contract conditions for skills 13

14 Other Broader Transformation Issues for Professionals Health and Safety matters in the total construction value chain. Labour intensive methodologies and technologies and supporting EPWP and job creation. Environmental and sustainability issues. Ethical and professional conduct at all times 14

15 . BUILT ENVIRONMENT PROFESSIONS STATE OF FIRMS 15

16 ISSUES THAT ARE CURRENTLY SHAPING THE COMPETITIVE STRATEGIES OF CONTRACTING Source: Rust and Koen (2011) 16

17 Key Drivers Market structure: dominated by SMEs industry consolidation (mainly in consulting engineering) Public sector procurement: public sector tendering practices public sector spend client risk management capacity payment delays( in approx 24% of earnings were outstanding over 90 days) Business conditions 17

18 Structure of Built Environment Professions Firms CESA (represents the largest number of most Consulting Engineering firms) reports that 66% of its members are SMEs employing less that 20 people. SAIA (represents the largest number of Architectural firms) reports that 86% of its members are SMEs. ILASA survey (represents the largest number of Landscape Architectural firms) of 2010 found 66 firms with an average of 2 employees and the largest employing 12 people. Construction Project and Construction Managers (CPM). Few pure CPM companies, mostly multi-disciplinary companies. Pure CPM dominated by micro-enterprises. ASAQS ((represents the largest number of Quantity Surveying firms) reports that it has approximately 450 corporate members with the majority being SMEs. SMME dominance of BEPs industry has implications for adherence and fulfilment of 7 elements of BBBEE. Codes of Practice for Qualifying Small Enterprises stipulates that they need to choose 4 elements weighted at 25% each to sum to

19 CONSTRUCTION CHARTER BEE SCORECARD REQUIREMENTS FOR QUALIFYING SMALL ENTERPRISES BBE ELEMENT WEIGH TING (%) TARGET FOR 2013 TARGET FOR 2014 TO 2016 OWNERSHIP 18 27,5% 30% MANAGEMENT CONTROL 25 25% 40% (Senior Management) EMPLOYMENT EQUITY (All management positions and total Black employed) % 60% SKILLS DEVELOPMENT 25 1,5% of total leviable amount ENTERPRISE DEVELOPMENT 25 0,5% of total leviable amount 1,5% of total leviable amount 0,5% of total leviable amount PREFERENTIAL PROCUREMENT 25 40% 50% SOCIO-ECONOMIC DEVELOPMENT CONTRIBUTION % of Leviable 0.25% of Amount Leviable Amount

20 Public and Private sector average building and construction investment per decade and per year for 2010 and Public sector building and construction investment (real 2005 prices) 57% 65% 54% 43% 52% 61% 62% Private sector building and construction investment (real 2005 prices) 43% 35% 46% 57% 48% 39% 38% Source: SARB online data series 20

21 Public Sector Projects Public sector contributes 65,7% of the total income of the consulting engineering profession. Income distribution by client by firm size Central Provincial Local Parastatals Private Total Large 8,8% 14,0% 21,1% 21,7% 34,4% 100% Medium 6,6% 14,3% 25,0% 17,0% 37,0% 100% Small 2,2% 17,6% 42,8% 12,0% 25,3% 100% Micro 6,2% 18,2% 25,0% 20,2% 30,3% 100% Total 8,1% 14,35 22,85 20,5% 34,3% 100% Source: CESA

22 Planned infrastructure projects Planned investment will be clustered around 18 Strategic Intergrated Projects (SIPs) under the co-ordination of the Presidential Infrastructure Coordination Commission (PICC) headed by the President Current and planned expenditure on infrastructure projects Infrastructure type Enabling infrastructure lumpy Social infrastructure Asset type Planned expenditure (R billion) Percentage of planned expenditure to total planned infrastructure budget Used (R billion) Planned (R billion) Electricity R ,1 % R348,6 R1 076 Transport R583 18,2% R78,6 R504,4 Liquid fuels R213 6,6% R0 R213 Water R74 2,3% R32,8 R41,2 Telecoms R15 0,4% R1,8 R13,2 Education R185 5,8% R125 R60 Health R110 3,4% R31 R79 Housing R78 2,4% R5 R73 Total R % R622,8 R2 581 Source: Budget Review 2012, National Treasury 22

23 Transformation in big firms BE Indaba 2010 Industry Views Recommendations on the implementation of sector charters Recommendation for the Monitoring, Verification and Rating agencies and Charter Councils to monitor implementation and compliance to scorecards, fronting etc. Recommendations on BBBEE linked to skills development and mentoring Recommendations on incentivizing BBBEE implementation 23

24 Transformation in SMEs - BE Indaba 2010 Industry Views Support small business through a preferential procurement Encourage cooperation between big and small companies through partnerships/jv/sub-contracting with significant skills and technology transfer Expand technologist base: by expanding the technologist registration category training and throughput which will lead to the flourishing of small companies Strengthen assessment/registration system: supported by the IDoW policy. Implement applicable policies and legislation (BBBEE) 24

25 Thank you 25

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