Bhavna Soni, President of the Institute of Municipal Engineering of Southern Africa (IMESA), responds to a comment made by National Treasury Director-General Dondo Mogajane (interview on Morning Live, SABC2, 12 November 2021) that engineers need to explain why services cost so much and keep escalating. He was referring to funds allocated to municipalities in the Medium-Term Budget Policy Statement delivered to Parliament by Finance Minister, Enoch Godongwana.
Bhavna says, “These are a few of the challenges faced by engineering departments in metro and local municipalities which contribute to infrastructure costs rising so drastically:
– 30% Contract Participation Goal (CPG) component for construction and professional service contracts, whereby a portion of the contract has to be allocated to targeted enterprises. This was introduced without putting proper processes and systems in place. The main contractor and professional service provider are still responsible for the work thus risk cost is included in the contract.
– Covid risk has been transferred to the contractor as well.
– Covid risk has slowed down productivity, due to health and safety requirements, which further increases the cost.
– Work stoppages by local forums delay the contract and the contractor claims further project costs.
– Poor performance of the contractor sometimes leads to termination and thereafter the new appointment to finish the work causes delays and further increases in infrastructure cost.
Other delays can be attributed to bureaucracy and the length of time required for Public Enterprises and Government to go through procuring goods and services.
Bhavna adds, “Apart from the above, we also have to contend with ever increasing Construction Industry Price increases due to exchange rates, steel prices and fuel prices. It is a constant challenge for our city engineers to provide the services that our communities expect.
“We appreciate that National Treasury is now engaging with professional bodies to resolve procurement issues related to interpretation of regulations and compliance requirements. As IMESA, we look forward to more opportunities to engage at a national level to explain our challenges and discuss ways to improve service delivery,” she concludes.