Keynote address by the Honourable TW Nxesi MP, Minister of Public Works at the Inaugural Project and Construction Management Professions Conference

Theme:
"Towards growth, development and transformation of the Project and Construction Management Professions"

The Minister of Economic Development, Mr Ebrahim Patel
My counterpart in Ghana, the Minister of Works and Transport, Mr Abraham Byandala
Representatives of government departments, entities and state owned enterprises
The CEO of the Council for the Built Environment, Ms Gugu Mazibuko, as well as chairpersons and CEOs of professional councils affiliated to the CBE
The CEO of the National Home Builders Registration Council, Mr Mongezi Mnyani
Representatives of the Chartered Institute of Building­ President (Alan Crain) and CEO (Mr Chris Blythe)
Dr John Fletcher from the Royal Institute of Building (RICS)
Representatives of labour and industry
Ladies and gentleman.

Let me begin by thanking our hosts - the South African Council for the Project and Construction Management Professions (SACP-CMP) - for inviting me to share some thoughts with you - and for their hard work in organising this important event. Thank you to the President of the SACPCMP, Professor Raymond Nkado and the Registrar, Ms Nomvula Rakolote.

On a lighter note, I have to admit to you, that when I was first appointed Minister of Public Works -just over a year ago - the first time I heard of the SACP-CMP, I was under the impression it was something to do with one of the Alliance partners - the SACP.

Today I am very clear as to the important work that the SACP-CMP carries out. This includes the following:

• Professional registration - ensuring the public are protected from bogus and unqualified people. [One of our tasks in the public sector is to ensure that increasingly we use registered professionals to ensure the quality of projects.]
• Establishing and developing standards for the profession - including establishing a standard generating body, accreditation of courses and recognition of qualifications.
• Developing and promoting a code of conduct - a very important function in a sector which has been plagued by unethical behaviour.

Combating corruption

Perhaps I need to stress this last point. This country is engaged in a life and death struggle against corruption and what we now call the tenderpreneurs. Part of the solution is to ensure that the professionals we train - for employment either in the public or in the private sectors - have to be imbued with a strong sense of ethics and service. We need more well-trained project and construction managers to start to close down the space for corrupt activities to take place.

At this time of the year - on the twentieth anniversary of the assassination of Chris Hani - we cannot help but reflect on the importance of having correct values in public life. Comrade Chris himself was incorruptible. So incidentally, was the former British Prime Minister, Margaret Thatcher, recently deceased. One of her obituaries caught my attention: Apparently she was greatly concerned by the use of public funds to purchase an ironing board -at a cost of 9 pounds(= R140) - for her official residence No 10 Downing Street. She insisted on paying for it herself.

Maybe the point I am making is that even where we do not share the same politics, we have to develop a common set of values based on the principles of the constitution and a commitment to public service.

So ethics and values are important in our sector, but the key to preventing corruption is to put in place strong financial systems and transparent procurement processes. The advice from our friends in SARS (South African Revenue Service) is the following: 'you have to make it easy for weak people to do the right thing; and difficult for bad people to do the wrong thing.'

I believe that the work we are doing now in Public Works to tighten up procurement processes - which forms part of a much larger initiative led by National Treasury - is key to combating collusion and price-fixing, and to ensuring value for money and delivery to the public.

Clearly the professional organisations - as well as organised business - have a crucial contribution to make in this regard.

The SACPCMP Conference and infrastructure development

The theme of this conference is: "Towards growth, development and transformation of the Project and Construction Management Professions".

This goes to the heart of government priorities in relation to infrastructure roll out as a tool to leverage regional economic integration and development- and to drive job creation, skills development and empowerment.

The conference provides an important opportunity for engagement and to forge synergies between government plans and private sector service providers.

I believe that this conference is taking place at a crucial time for the built environment sector in our country. There is now a common understanding that infrastructure development has to drive economic and social development in the coming years:

• It is a consistent theme in State of the Nation Addresses in recent years;
• It is at the heart of the New Growth Path and National Development Plan;
• It is the reason for establishing the PICC (Presidential Infrastructure Coordinating Council in 2011) which in turn has launched the various SIPs (Strategic Infrastructure Projects).
• Infrastructure roll-out and economic integration were the focus of discussions on the development of the African continent - both at the AU (African Union) and the BRICS summits this year.

We cannot ignore the massive impact that the infrastructure roll­ out will have on our sector. It is both a challenge- and it also constitutes a massive opportunity for transformation. Let me explain.

Challenges include:

• Working smarter, faster and in a coordinated why- between departments and between levels of government - to get the job done. I have argued that as Public Works we have to do away with silos so that we achieve the necessary integration. This is an on-going project of the MINMEC- the coordinating body of national and provincial departments of public works.
• As the state, we need to rebuild capacity to manage relations with contractors and service providers - from design right through implementation to maintenance and disposal. Indeed, as part of the programme to rebuild the Department of Public Works we have budgeted to recruit some 280 built environment professionals in the next three years with this in mind.
• We have to tackle the issues of procurement, over-pricing and even fraud and corruption. We will fail if we don't get on top of this challenge. I also believe that this is a transformation issue. We are talking about professional ethics and professional skills in relation to drawing up and costing specs and managing implementation - all of which is critical in the fight against corruption and tenderpreneurship.
• By the way, government also has to get its house in order - particularly in relation to late payments. We cannot accept late payments which threaten the lifeblood of small contractors, in particular. The President has made it very clear that we will be held to account on this matter. In addressing the CIDB's National Stakeholder Forum last year, I said that as DPW we have to re-invent ourselves as a better client - a model client - to the construction industry. With this in mind I will be visiting KZN tomorrow to meet with contractors to address problems of late payments.

Let me turn to the opportunities which come with the infrastructure roll-out plans:

• One of the impediments to empowerment  and job creation in the sector has been the slow rate of recovery of the construction industry after the 2008 crash. The big construction companies have had to lay off workers in droves. Massive state investment will fundamentally change the market conditions under which the sector operates. In fact in a short period of time we will be lamenting about shortages of skills and supplies - unless we start preparing now.
• But we have to learn from the challenges we experienced around the 2010 World Cup stadiums - in relation to over­ pricing; poor labour relations and the lack of long-term empowerment and transformation.
• We have to be clear that we are not building infrastructure just for its own sake - and that this is also a strategy for driving economic growth and social development- and that this includes job creation, skills development and empowerment of emerging and female contractors and professionals.If we can get an efficient infrastructure roll-out which goes hand in hand with empowerment and the transformation of the built environment - we have the ultimate win-win situation.

I will not go into further detail. Later in the conference programme, the Minister of Economic Development will speak on the Government's national infrastructure roll-out plans; and the Minister of Public Enterprises will discuss 'infrastructure as a driver of economic development in both South Africa and the continent.'

The role of SACP-CMP and built environment professions

My task now is to emphasise the crucial role that the project and construction management professions - and the other built environment professions - play in the infrastructure roll-out plans. In simple terms, we can't run projects if we don't have sufficient project managers - and the other necessary professionals. I have said that we are already suffering from a lack of professional skills in the public sector - even before the major infrastructure roll-out envisaged.

I would suggest that this conference needs to address a number of questions therefore:

• How do we rapidly upscale the production of project and construction management professionals - and other built environment professionals?
  • We need to reach out to the schools and provide support to promising learners - right through the tertiary education process;
  • We need to expedite the training and mentoring of graduates so that they attain full professional status in a shorter timeframe. I am not talking about dropping standards here. We have to facilitate and support candidates - make sure they get the necessary breadth of exposure and experience so that they can progress more rapidly towards professional status.
•  As part of growing the built environment professions, we also need to transform those professions - so that they eventually more closely reflect the demographics of the country. It cannot be right that after nearly 20 years of democracy, still only approximately 25% of built environment professionals are black. I hope the statistics for the project and construction management professions are better than this average figure.

The CBE (Council for the Built Environment) and the CIDB (Construction Industry Development Board) - I know- are researching and seriously addressing these concerns. It is also important that SACP-CMP - and this conference - takes a debate on these issues - and comes up with concrete proposals.

• Part of transforming the built environment professions and the sector must involve embracing the thinking around the Green Economy to ensure that infrastructure development is increasingly sustainable and mindful of the carbon footprint we leave behind us.
• As Minister of Public Works - responsible for the EPWP (Expanded Public Works Programme) - designed to mitigate the effects of rising levels of structural unemployment - I would also suggest that transformation must also include an understanding of - and commitment to - labour intensive methodologies where appropriate.

Job creation and combating unemployment is government's number one priority- which in turn is critical to combating poverty and inequality. It is envisaged that national infrastructure roll-out will drive this process. Our responsibility as a sector, therefore, is to strive to ensure maximum job creation for each Rand of investment.

• In your deliberations, it would be useful to draw on international examples of best practice - and I am pleased to see that the programme includes an international perspective.

The Role of the Private Sector

The President's SONA provides a clear commitment to major infrastructure roll-out in the years ahead. But clearly the state cannot achieve this alone. We are going to have to forge real partnerships with the private sector to provide a number of services:

• to provide capacity in the construction sector and to source high level built environment professionals and other skills that are lacking in the public sector
• to project-manage and implement large projects, and
• to help unlock infrastructure spend.

As the public sector and the private sector we need each other. Having said that I think it is important to add that the relationship has to be carefully monitored and managed to ensure value for money- in terms of the public funds that we have to account for.

Issues that we have to consider include the following:

• In any assessment of the correct division of responsibilities between state and private sectors in a partnership, the issue of where risk and final responsibility lies is crucial - so that we don't see a situation where after signing major contracts the service provider still comes back to request additional funding from the state.
• We can agree that where the state does not have capacity - in relation to design and construction- we have to in-source. However, government and client departments in general need to build capacity to manage their relations with service providers and consultants - from design and specifications, through construction phase, to maintenance and even disposal.

Health and safety

Let me commend the SACPCMP for placing the issue of health and safety prominently on the conference agenda. Last year we celebrated the signing of the Construction Health and Safety Accord- involving the Department of Labour, the Department of Public Works and other role players.

We also welcomed the memorandum  of agreement between the Department of Labour and the SACPCMP -which is charged with the registration of Health and Safety practitioners in the sector. The agreement covers the administering of the Accord – enforcing the appointing of competent and professionally  registered persons to ensure safer construction sites.

The safety of employees must be an absolute priority. It is unacceptable that on average two South African construction workers die every week.

Going forward, we must make it mandatory for all tenders and contracts to adhere to the provisions of the Accord. Equally we expect every employer - in partnership with labour - to ensure that health and safety regulations are implemented and enforced.

I wish you well in your deliberations and look forward to reading the record of these proceedings and any recommendations  to come out of the conference.

Thank you.