Skills for Infrastructure Delivery in South Africa

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Skills for Infrastructure Delivery in South Africa

• Rodney Milford and Ntebo Ngozwana
• cidb
• 31 October 2006

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• A lot of work but wholl do it?
• There are enough projects ahead to keep the
  construction boom rolling if the industry can
  expand its supply of skills
• The problem may lie with the skills to carry
  construction to these growth levels

3
Background / Overview

• cidb commissioned study
• Demand for skills
• demand for infrastructure
• Existing capacity
• Skills supply pipeline
• Conclusions
• Recommendations

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Demand for Infrastructure
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Methodology

• Primary data sources
• Private sector
• Nedbank Project Listing, Industry Insight
  Database, Project Owners Forum, etc
• Government
• MTEF, Budget review 2006
• SOEs
• MTEF, Nedbank Project Listing, etc
• Estimates of scheduling, approval, etc

6
Construction GFCF by Asset Type
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Demand

• Overall demand for construction and engineering
  goods and services has only recently reached (and
  exceeded) the previous levels attained in the
  1970s and 1980s
• however, construction value-added has seen a 44
  increase since the low point of 1999

8
Demand

• Private sector demand has grown steadily and may
  continue to grow at about a 10 increase at best
• Government sector shows impressive increase in
  growth in roads, education and housing
  infrastructure (30 to 50 increase over three
  years) but a less significant improvement in many
  of the other sectors (5 to 15)
• Public corporations contribute around 40 to the
  R372 billion infrastructure investment targets

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Demand

• Overall, growth in demand is likely to be about
  10 to 20 pa in the short-term

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Demand for Skills
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Methodology

• Analysis of infrastructure expenditure
  disaggregated into
• project types
• skill requirements per project type
• Interviews with different client bodies (e.g.
  ESKOM)
• Development of model for the types and number of
  skills required for different infrastructure
  programmes calculated in units of R100 million

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Non-Residential

• 20 growth
• 19 more contract directors
• 39 more contract managers
• require considerable experience (5 to 10 years).
• in the order of hundreds in a few artisinal areas
  (e.g. concrete shutter-hands and steel-fixers)
• experience can be obtained in shorter periods

13
Civil

• 20 growth
• 29 contracts managers
• 59 senior site agents
• require the most on-site experience
• 800 shutter-hands and plant operators

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Summary

• Significant experience
• a few hundred
• Less experience
• a few thousand

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Existing Capacity
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Current Capacity

• Data suggests that out of a total of 101 460
  individuals currently employed
• 9 979 plant and machine operators
• 7 570 technicians and associate professionals
• 5 899 professionals
• 6 330 senior officials and managers

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Current Capacity Private Sector

• Stretched to capacity
• productivity and quality
• cost escalations

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Escalating Costs
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Escalating Costs

• By end of 2005, construction costs had increased
  almost 85 compared to the general Producer Price
  Index (PPI) increase of 40 since 2002
• Although construction material costs have risen
  significantly higher than other production costs
  (60 as opposed to 40), person-power,
  professional fees and profit and overheads have
  grown fastest

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Current Capacity Public Sector

• Vacant posts
• 30 to 40
• Experience
• 10 less than 1 year experience
• 40 less than 5 years experience
• Engineering professionals
• 13 turnover
• 5 retirement rate

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Current Capacity Developing Contractors

• Time cost and quality
• experience and skills
• Impact on client project and contracts management
  requirements

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Summary

• Capacity constraints
• experience constraints
• Unless serious efforts are made to address
  capacity constraints in the medium term, cost
  escalations are likely to stifle growth going
  forward

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Supply Pipeline
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Supply Pipelines

• Further Education and Training
• Higher Education
• Universities
• Universities of Technology
• SOEs and Private providers
• Sector Education and Training Authorities- CETA

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Supply

• Numbers are increasing, but .

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Central Issues

• Many of the individuals in the sector lack the
  requisite critical skills and experience
• new entrants
• high turn-over
• lack of continuity of work (for individuals and
  contractors)
• and

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Central Issues

• Very real concerns relating to the efficiency of
  the Skills Pipeline
• input (relevant subjects and interest)
• FET (quality and relevance)
• HET (numbers and quality)

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Conclusions
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Conclusions

• Short-term
• possible to extend the effectiveness of the
  industry
• Medium-term
• comprehensive challenge to restore or replace the
  skills pipeline

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Recommendations
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Recruitment and Retention

• Aggressive recruitment and importation where
  necessary of the required scarce and critical
  skills
• public and private sector
• Seek to retain and/or re-employ people who
  already may have these skills

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Delivery Models

• Changes in delivery systems can assist to ensure
  that capacity is used more beneficially in
  addressing new demands and contributing to the
  development of new skills
• need delivery models that allow for continuity of
  work, rather than spreading the sunshine in a
  manner that prevents sustainable enterprises
  being developed as well as skilled workers

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Delivery Models
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Contractor Development Programmes

• Increase contracting capacity
• provide for targeted empowerment
• procurement models to promote continuity of work
• leading to sustained employment and skills
• improve performance and quality of work by
  contractors

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Contractor Development Programmes
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Improving the Pipeline

• Increasing the number of mathematics and science
  graduates at Grade 12 level
• Training, mentorship and internship programmes to
  improve the level of critical skills, including
  skills and competence that can only be acquired
  though workplace exposure and experience

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Improving the Pipeline

• Increase capacity of institutions in certain
  fields to address scarce skills required
• Align programmes with relevant occupational
  outcomes
• as well as with professional body requirements
  where relevant
• Interventions to enable learners in FET and HET
  to attain the requisite experience
• Support for Phase II processes (in terms of
  professional registration)

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A Focus on Artisan Skills

• Key condition is to create a sufficient pool of
  trained artisans
• need for programmes that result in artisan
  qualifications
• qualify 25 000 artisans by 2010 and additional 15
  000 in training

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Priority Trades

• Carpenter and Joiner
• (Wood machining)
• Boilermaker
• Automotive Electrician
• Diesel mechanic
• Earth moving equipment mechanic
• Electrician (light and heavy)

• Fitter and Turner
• Instrument mechanician
• Mechatronics trades worker
• Millwright
• Motor mechanic
• Sheetmetal trades workers
• (Steel Fixers)
• Toolmakers and Patternmakers
• Welder

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Current Routes

• Apprenticeships (current N courses)
• Learnerships
• National Senior Certificate (phasing out N
  courses)
• Recognition of prior learning (Section 28)

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But ..

• Current definition of artisan is outdated
• Apprenticeships
• Outdated N courses and N requirements
• Outdated work experience schedules
• Trade tests no longer applied
• Learnerships
• No articulation with artisan requirements
• Inappropriate fundamental requirements
• Majority of related NQF qualifications dont lead
  to artisan level
• Work experience insufficient and not clearly
  specified

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SAFCEC WC CoE

• Industry led
• Private / public partnership
• Relevant outcomes driven
• Work experience integrated
• Student centre learning
• 100 to 200 learners pa
• R40k to R50k per learner

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Industry-wide Approach Needed

• Larger contractors are able to train
• Smaller contractors and sub-contractors often are
  not able to, or are unwilling, to train

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Proposal for an ESDA

• A flexible ESDA model can support this imperative
  and ensure that individuals are moved across
  projects and are able to have continuity in
  learning and in this way develop the requisite
  experience and competence

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What is an ESDA?

• A model that can assist in enabling greater
  numbers of learners and employers to participate
  in skills development mechanisms
• Minimising the administrative burden associated
  with establishing and implementing regular
  learning

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Role of ESDAs

• Recruit and select learners
• Facilitate access to relevant training
• Ensure work placement to access relevant
  experience
• Take responsibility for administrative
  responsibilities
• Support access to post-learning opportunities

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Governance

• Different options of the ESDAs research surveyed
  included
• Club
• Section 21 not for profit
• Division within an employer structure
• CC

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cidb Role

• Exploring the feasibility of the establishment of
  regional ESDAs, in partnership with
• private sector
• government (DPW)
• CETA
• Key is to provide greater access to skills
  training by smaller contractors / sub-contractors

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Enabling Factors (i)

• Support a process of enabling the public sector
  to develop the required human resources
  (experienced skilled people) to procure and
  package large projects (ito alternative service
  delivery models)
• IDIP (NT, DBSA, cidb)
• Ensure that the data-base of projects is
  developed and supports increased planning
• cidb iTender / Register of Projects

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Enabling Factors (ii)

• Funding mechanisms are designed to specifically
  support these interventions and relevant tax
  incentives must be put in place
• CETA, DoL
• Support a national assessment and quality
  assurance process
• Best practice, Management Systems and Plans,
  Rating Systems

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Unity of Purpose

• Thank You