Ced magazine october 2015 edition by Construction and Engineering Magazine

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STRATEGY AND LEADERSHIP

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near-market expansion, you will

ECONOMY

ENGINEERING AND ECONOMIC PROSPERITY OF NATIONS

By building the technical capacity of the workforce through quality engineering education programmes, the country could build a competent technical workforce, which could provide several pathways to economic development

14 challenged" group, you have ample headroom for growth, but your capabilities aren't a good fit for the opportunities. This can happen when a company lets its performance drift, or when its market changes, creating new upsides that require different capabilities. Your growth challenge is adding or enhancing capabilities to capture your available headroom, not chasing unrelated markets. Other companies are "headroomchallenged." They are successful in their markets as currently defined, but have little upside: Growth prospects are leveling off. If you are in this group, start looking for previously unnoticed opportunities for inmarket growth, and leverage or improve your distinctive capabilities to exploit them. A l t e r n a t i v e l y, s e e k n e a r - m a r k e t opportunities by redefining or reimagining your business. A hardware or software supplier may redefine itself as a solutions provider (many tech companies have done this). A search-engine company can become an information management company, as Google has. A food company can recast itself as a nutrition company (consider Nestlé). Redefining your business puts you in the "capabilities-challenged" group, where new skills will be required, and risk may increase - but so will opportunities. As your capabilities systems improve in response to their deployment in your new 46 | www.cedmagazineng.com October 2015

FEATURES

11 PRACTICE THE PRACTICE CHALLENGE Top 5 challenges facing architects in Africa amidst serious encroachment by foreign practitioners NEWS EXTRA

GETTING THE PROJECT RIGHT FG to review Second Niger Bridge contract after detecting errors

INFRASTRUCTURE To be continued Author Profiles: " Gerald Adolph is a senior leader in Strategy&, PwC's strategy consulting group. Based in New York, he specializes in growth strategy. He was formerly the senior partner leading the mergers and acquisitions practice at Booz & Company. " Kim David Greenwood is a director with Strategy& and co-leads its growth strategy team. Based in San Francisco, he works extensively with technology, communications, hospitality, consumer product, and industrial companies.

NIGERIA’S RAIL NIGHTMARE In the comity of nations with annual GDP in the range of $500 billion, Nigeria is probably the most backward country in rail development.

7 INFRASTRUCTURE POWER SECTOR LEADS THE DECAY

CED PROPERTY THE NIGERIA’S HOUSING CHALLENGE Affordable housing: Nigeria’s big challenge also a ‘massive opportunity for savvy investors with eye on the real growth

Infrastructure decay prevalent in the power sector www.cedmagazineng.com October 2015 | 3

u contents

DEPARTMENTS OIL AND GAS REPORT 23 STRATEGIC MOVE Chevron South Africa welcomes new chairperson, Shashi Rabbipal who si expected make the big difference 26 GAS DEVELOPMENT Tanzania launches project to pipe gas to the capital 36 AFRICA’S GREEN INITIATIVE New bon issue set to help Africa go ‘green’ - A way of bankrolling a clean energy revolution

38 FUNDING THE PLANET’S FUTURE Will the billion required for the SDGs be sustainable?

33 HOUSING AFRICA’S HOUSING CHALLENGE Estimates suggest that by 2050 Africa's population will have doubled reaching 2.4 billion which will stretch the cities to beyond breaking point due to inadequate housing and associated infrastructure needs such as roads and clean water..

SPECIAL FEATURES

10 INFRASTRUCTURE STILL GOING STRONG Rail mass transit project in Lagos, Nigeria is still on track despite change in government

World Bank projects economic growth for Kenya mainly driven by construction industry 4 | www.cedmagazineng.com October 2015

compact discs supplanted cassettes. Sony faltered in the late 1990s, when its capabilities system, based on consumer devices, was upended. The shift to digital music file formats, such as MP3, required capabilities in computers and software. Downloadable music files had a clear advantage over compact discs in convenience, selection, and price. By 2001 there were 50 different portable MP3 players for sale on the U.S. market. None of them, however, quite fit the bill. Device interfaces were kludgy, downloading and managing music files could be haphazard and difficult, and online platforms could be quirky and unreliable. Some were downright sketchy (remember Napster?). Enter Apple. This was one of the very few companies with capabilities in userfriendly product and interface design, technological integration, stylish fashionforward marketing, and the coordination of creative media (which, along with Steve Jobs's personal star power and friendships with musicians, helped it negotiate with record labels in the extremely insular music industry). Apple was thus well positioned to make a dramatically successful near-market move; the iPod hit the market in 2001, at first for Macintosh users only, and was soon outselling its competitors. The company didn't stop there: It pursued headroom within that territory, by opening the iTunes online music store, enabling consumers to buy and manage digital music simply and reliably and syncing with Windows-based computers as well as its own. With these innovations, Apple filled a needs-offer gap that few other companies saw: It provided a reliable, standardized system that made purchasing, keeping, and listening to music relatively easy. By 2008, Apple had claimed nearly 50 percent of the market for music players. Its nearest competitor's share was in the single digits. Adding video, games, publishing, and lifestyle apps, along with the iPhone, represented a series of natural in-market growth moves. For the next five years, Apple had a virtual lock on its customers; they were unwilling to switch because of the compelling nature of the company's seamless offering. Since 2013, however, a new needs-offer gap has been identified: Streaming media is even more convenient and less expensive than downloads. The online radio service Pandora was the first to fill this gap, and others are rushing to compete: Amazon

with a near-market move, and Spotify and Netflix as new entrants. Apple pursued an in-market move with its Apple Music service, introduced in 2015. Apple Music builds on the acquisition of Beats, a startup founded by music industry veterans, which improved Apple's capabilities for curating and enhancing audio and video content. This new needs-offer gap is still only partly understood, and it's not clear which companies will be favored. But it is likely that the headroom is not yet exhausted and further needs-offer gaps will be discovered in the audio-video market as technology continues to evolve. The impact of biotechnology on pharmaceuticals and agricultural chemicals is another good example of the difference between evolutionary and disruptive innovation. Advances in biotech have provided major innovations in pharmaceuticals since the 1980s, enabling life science companies to develop entirely new kinds of genetically engineered drugs for treating diseases such as diabetes and cancer. However valuable these innovations have been, they simply provide another way of introducing molecules into the established regulatory, commercial, selling, support, and reimbursement systems. No major changes in the business models or capabilities systems have been required, at least so far. (Personalized medicines may turn out to be more disruptive.) In agricultural chemicals, however, biotech has been disruptive. The advent of genetically modified plant cells completely changed the roles that seeds and chemicals played throughout the industry's value chain. Companies that provided genomics had to extend themselves upstream, downstream, and horizontally. Companies that provided agricultural chemicals had to integrate upstream into seeds, and to combine or partner with downstream companies in the processing and delivery chain. In some cases, agricultural companies had to create new brands at the end-user level to capture the value of their innovations. Companies can respond to evolution and even step-change innovation by improving, and in some cases by adding to, their capabilities systems. But to respond to a true disruption, companies often need to intentionally cross capability boundaries, adding entirely new capabilities to survive. The Lowe's hardware chain did this successfully in the 1990s. Traditionally, Lowe's sold construction materials, mainly

to professional homebuilders, through small, full-service outlets. In 1982, Home Depot introduced a disruptive new business model - "big box" stores in a home improvement center format. These outlets were much larger than Lowe's stores (90,000 square feet versus 15,000) and had much lower operating costs, mainly thanks to labor savings from scale and self-service. Lowe's struggled to compete for nearly 10 years. Then in 1992, Lowe's converted its own stores to the new home improvement format and became a strong, successful competitor. If you respond to disruption by changing your business model and capabilities system, as Lowe's did, you can't dabble. You have to commit fully to a new business model, and build the necessary capabilities as soon and as thoroughly as possible. A Cycle of Continuous Renewal The goal of a growth strategy is to create continuous renewal so that your top-line revenue increases steadily. As we've seen, you need a single viable strategy combining in-market and near-market growth, backed up by the right group of capabilities. Inmarket growth converts your capabilities into increased wallet share, providing returns that fuel investment. Near-market growth makes the most of the investment by using your capabilities more broadly. Capabilities development makes both kinds of growth more successful. Success in each of these areas reinforces success in the others, and the cycle continues to accelerate as long as you stay in practice. But where to begin? That depends on where you are right now. The possibilities are best visualized as a matrix, in which the horizontal axis represents the distinctiveness of your capabilities system and its relative fit with the opportunities you have or wish to create, and the vertical axis represents the headroom for growth in your current markets. Most companies fit squarely into one of the four resulting quadrants (see Exhibit 2). The "poor prospects" lack distinctive capabilities and apparent opportunities, and thus are in a weak position. If you are in this group, your only path to organic growth success - assuming your business survives is to do foundational work on strategy and execution. Focus on improving your core capabilities systems and value propositions. Only then can you consider either in-market or near-market growth strategies. If you are in the "capabilities-

LEADING WOMAN

19 WATER AFRICA NEEDS WATER Disruptive innovation, paradigm shift to drive water-sector sustainability

6 CONSTRUCTION UPDATE KENYA ECONOMIC GROWTH

DEVELOPMENT

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42 STRATEGY AND LEADERSHIP GROW FROM YOUR STRENGHT The only sustainable way to capture new opportunities is to remain true to what your company does best.

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STRATEGY AND LEADERSHIP companies in the chemicals industry, for example, traditionally expanded by leveraging the production system they already had in place. This reduced the costs of both product streams. However, this approach led commodity chemicals companies to enter specialty businesses, whose customers demanded custom manufacturing, hands-on service, and rapid-response design that they couldn't easily deliver. They had crossed a capability boundary, as we call it, in which the old capabilities no longer provided economic or customer acquisition advantages. As a result, over time the industry has s p e c i a l i z e d , e vo l v i n g away f r o m multicompetency conglomerates. Some companies returned to commodities while others migrated to a focus on agricultural products or specialty chemicals. Capability boundaries also often arise when companies seek geog raphic expansion. For example, consumer product and retail companies moving from Europe or the U.S. to emerging markets such as India must adapt to radically different requirements and build new types of relationships. Retailers may have to modify store formats, assortments, logistics approaches, and brand positioning for local markets - sometimes to the point where their capabilities system may not easily stretch to accommodate distant locations or cultures, and still take advantage of the same value propositions and capabilities systems that make them successful at home. In general, you should cross capability boundaries consciously and cautiously. The secret to successful near-market expansion is balancing creativity in how you extend your capabilities with a judicious view of when you are overstretching. Companies that use traditional adjacency definitions or ignore capability boundaries can easily find themselves in an adjacency trap. One famous example involved Sears Roebuck's acquisition of the brokerage house Dean Witter Reynolds in 1981. This proved that customers didn't necessarily want to "buy their stocks where they buy their socks," as one critic put it. In some industries, companies are choosing to cross capability boundaries to survive. For example, as shown in Exhibit 1, convergence among the computer, telecommunications, and entertainment industries is forcing companies to expand their business definitions. Each company carves out its own path: Thus, Google and Netflix are moving from their established software businesses to generate digital television 44 | www.cedmagazineng.com October 2015

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content, whereas other companies such as Apple and Microsoft have resisted the temptation to cross that capability boundary. Disruption vs. Evolution A casual look at the business media would suggest that disruption is everywhere, but disruption has become one of the most overused words in the business lexicon. Too often, a rapid, innovative evolutionary change in an industry is confused with disruption. Knowing the difference has significant implications for your growth strategy, capabilities system, and business model. Most industries evolve continuously, through technological change, business model innovation, and improvements in everyday practices. Evolution affects companies and their customers - lowering costs, creating new needs-offer gaps, and enhancing products or customer e x p e r i e n c e s. E ve n b r e a k t h r o u g h innovations, which deliver a step change in costs and benefits but do not require fundamental changes in capabilities systems, are not necessarily disruptions. True industry disruptions are rare. They happen when a technological or business model innovation thoroughly changes or obliterates existing business models and their associated capabilities systems. Disruptions create situations in which every company has to reexamine its capability boundaries, or risk losing its livelihood. In the music business, the introduction of the compact disc in the early 1980s was a breakthrough innovation that led widespread evolutionar y chang es

throughout the industry. But it was not disruption; it did not fundamentally change the prevalent talent development, promotion, and physical distribution-based business model. Most of the companies that were prominent before the compact disc held on to their positions and practices after it was introduced. The introduction of digital music files in the mid-1990s, on the other hand, was disruptive. (See "The Portable Music Saga".) It utterly changed business models, capabilities systems, and supplier-buyer relationships throughout the industry. Internet-enabled innovations have driven many similar disruptions, in businesses as varied as book retailing, journalism, and ondemand dispatch and use of taxis and limousines. The Portable Music Saga In-market, near-market, and disruptive growth opportunities often happen in the same market over time. One of the most compelling examples is the market for portable recorded music and sound over the past 50 years. It started in the 1950s at the dawn of rock-and-roll music, when teenagers desperately wanted music that they could take with them to their rooms and to parties. They carted around portable record players and boxes of vinyl 45 or 33 RPM discs. When the cost of the transistor fell in the mid-1950s, Texas Instruments and Sony capitalized on this needs-offer gap by offering radios that could be easily carried and mounted in automobiles. This manufactured product also helped build the market for recorded music, in the form of vinyl record albums that people could play at home. But recorded music and the convenience of portability did not exist in a single package, and thus a further needs-offer gap existed. In 1979, Sony showed that it had found a cycle of continuous renewal when it filled that gap with the introduction of the Walkman, a compact device for playing cassette tapes through miniaturized headphones. This dramatic new play for headroom led the category for many years. Sony's capabilities in designing and marketing small radios served it extremely well in the world of small audio, even after

ENGINEERING, KEY TO REAL ECONOMIC GROWTH

“Economic development is based on industrialisation , and the inputs for development of infrastructure, agriculture, environmental protection and provision of services are provided by industrialisation ,”

or the past 55 years, there have been endless discussions on the part to as greater Nigeria, especially, after the British lowered the Union Jack flag in 1960, and several governments including the military that have ruled the country more than the civilians. The governments have come and gone. Yet very little progress has been made. One thing is clear, if you are not creative and you want to grow, there is no hope of any real growth. Governments after government tickle with the idea of diversification but none has really worked on the real part to diversification which is engineering and knowledge-based economic diversification and growth strategy. The present government is again hopeful of getting a real strategy that will form the Launchpad for real diversification, even though there is no clear cut policy direction on this path. Which simply means that there is a big question mark over whether it will succeed where others have failed. What then is the real part to nation's economic growth? The simple answer must engineering and countries, especially Nigeria must embrace knowledge-based and engineering economic. Everything in life, as said, is engineering and engineering is life. rd

The 3 Edition of Nigeria's Construction Industry Hall of Fame Lecture series revealed much of the above strategy as the guest speaker Engr. Otis Anyaeji said engineering stipulations and innovations needed to be objectively and economically determined in implementing both the Vision 20:2020 or its equivalent, and the National Integrated Infrastructure Master Plan. “Economic development is based on industrialisation, and the inputs for development of infrastructure, agriculture, environmental protection and provision of services are provided by industrialisation,” he said. He added that the country also needed capabilities and skills to identify possible sources of related technologies such as design and engineering firms, small and medium-sized enterprises, and research and development institutes, among others

Chairman of the occasion, Engr. Ibikunle Ogunbayo, an engineer, said without viable construction industry, the economy of any nation is not going to develop. He added infrastructural provision is very important to the development of the country. No doubt, the oil and gas sector is more attractive to the sector because of many factors which include corruption and inefficiency of government policies and transparency in governance. Yes, worldwide, the largest companies in any economy are the oil companies, but the real growth of those economies are engineering based which also include oil. But engineering is not only about oil but about everything – agriculture, telecommunication, manufacturing among others. Hear my submission at the lecture “The changing workforce and technology needs of a global knowledge economy are dramatically changing the nature of engineering practice, demanding far broader skills than simply the mastery of scientific and technological disciplines. “The growing awareness of the importance of t e ch n o l o g i c a l i n n ova t i o n t o e c o n o m i c competitiveness and national security is demanding a new priority for application-driven basic engineering research and practice.” Success in knowledge-based economies depended largely on the capabilities of people who were skilled in meaningful and consistent ways. “Engineers are the ideal problem solvers. When you consider that economic studies conducted before the Information Technology revolution show that as much as 85 per cent of measured growth in the United States income per capita was due to technological change, a strong case can be made for seeing engineers as the key knowledge workers for capacity building and sustainable economic growth in emerging economies.” Currently, because oil prices are low and our foreign exchange position is not so strong, there is the need for government to be innovative in approaching its development plans that will bring about a serious knowledge-based engineering economic growth. To be continued....... www.cedmagazineng.com October 2015 | 5

CONSTRUCTION UPDATE

KENYA ECONOMIC GROWTH World Bank projects economic growth for Kenya mainly driven by construction industry

new World Bank report has painted a favourable economic growth for Kenya with the economy expected to grow at 5.4 percent in 2015, an improvement from the 2014 growth rate of 5.3 percent. The report also projects the growth rate in 2016 to be at 5.7 percent. Speaking during the release of the report, World Bank country director for Kenya Diarietou Gaye said that economic growth for Kenya has all it takes to become one of the best performing economies in Sub Sahara Africa. But he added that this will be determined by the way the government responds and manages the challenges emerging from the current global economic environment. Dabbed Kenya Economic Update (KEU), the report attributes the economic g rowth to ong oing infrastructure construction in the country and strong consumer demand. In recent years, Kenya has embarked

on ambitious plans to construct major infrastructure in the country. For instance, China is constructing the Standard Gauge Railway whose construction is ongoing and is expected to boost the country's economy. The railway line which will run from Mombasa-the Kenyan Coast through Nairobi to Malaba on the Kenya-Uganda border is expected to enhance the movement of goods and people across East Africa. Currently, the project has 25,000 local workers. Early this year, Kenya embarked on major road construction plan covering 10,000km.The roads are being constructed in three phases under the Public Private Partnership (PPP). In 2014 Kenya signed a Sh42 billion deal with a Chinese communication company for construction of the first three berths of Lamu port, part of the ambitious Lamu Port South Sudan Ethiopia Transport (Lapsset) corridor. The Lapsset project is expected to serve land locked countries in the wider Eastern Africa region. These construction projects Kenya says are meant to make up for decades of under-investment that stagnated economic growth and cement its status as East and Central Africa commercial hub. The ministry of Transport and

NIGERIAâ&#x20AC;&#x2122;S POWER CHALLENGE French Development Agency to grant FG funds for power sector

rance says it has granted 170 million dollars aimed at increasing the power supply for the Federal Capital Territory (FCT) and also plans to provide support for other power projects, NAN/CED Magazine report The French Ambassador to Nigeria, Mr Denys Gauer, represented by Mr Georges Vanin, First Counsellor, Political Affairs 6 | www.cedmagazineng.com October 2015

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and Communication, Embassy of France, said the power sector was one of the three priority sectors identified by the French Development Agency (AFD) in its 20142016 strategy in Nigeria. He said; "The AFD is willing to improve the efficiency of the private supply networks through a 150 million U.S. Dollars soft credit facility granted to two

Infrastructure believes that the ambitious infrastructure construction plan will create demand for engineers, surveyors, technicians, machine operators and general workers. Eventually This according to the ministry will reduce the menace of unemployment among an ever growing population in Kenya. However, John Randa, Senior Economist and the Lead Author of the World Bank report notes that the current expansive fiscal path also presents a real risk to economic growth. "Although heavy budget on infrastructure is a boost for Kenya's production space and future growth, the short- to medium-term macro-fiscal framework is vulnerable to macroeconomic shocks," he cautions. The Kenya Economic Update report also noted the progress being made by county governments to boost rural economies through the devolution of funds. The Word Bank however underscores the need for transparency, accountability, and public participation as key elements of devolution. The 12th edition of the KEU was prepared by the World Bank Group in partnership with the National Treasury and members of the Economic Roundtable, who include the Ministry of Devolution and Planning, Council of Governors, Commission for the Implementation of the Constitution, Kenya School of Government and the Center for Parliamentary Studies and Training, Central Bank of Kenya, Kenya Revenue Authority, Kenya Vision 2030, Kenya Institute for Public Policy Research and Analysis, International Monetary Fund, Kenya National Bureau of Statistics, National Economic and Social Council and Office of the Controller of Budget. local banks. "The credit facility is under final assessment by AFD for funding Distribution Companies investments." According to him, in addition, AFD is working on another 150 million dollars credit facility to support the private sector initiatives in favour of clean and renewable energy. He also added that the AFD was willing to support the reform of vocational training in the power sector through financing the National Power Training Institute of Nigeria (NAPTIN).

way that supports the other three forms of growth. This can be accomplished through a variety of means, including M&A, innovation, and operations improvements. All four of these topics may seem familiar; they have been discussed over the years at most companies. But the linkages among them are often overlooked. By strengthening those linkages, your company can enter into a cycle of ongoing self-renewal. Most companies exhibiting consistent long-term growth - Amazon, Apple, Danaher, Disney, General Electric, Hyundai, Nike, Novo Nordisk, Oracle, Starbucks, and Walmart among them - have followed and continue to follow this path. Headroom for Growth Companies frequently overlook the growth opportunities that are right in front of them. Sometimes they are tempted by attractive-looking opportunities in other markets, or lured by the idea of diversification into other businesses. Sometimes, they simply haven't spent enough time trying to imagine how their approach in an existing market could be changed to unlock additional growth. The answer lies in finding headroom: potential new business in an existing market. The headroom for in-market leverage is the customer revenue a company could have beyond its current business, minus that which it is unlikely to get. For example, some fast-food restaurant chains have increased their revenues by selling premium coffee, espresso, and other specialty drinks to their regular breakfast or lunch customers, rather than ceding that business to Starbucks or Dunkin' Donuts. Their headroom is the total potential premium coffee drink sales, minus the revenue from people who are unlikely to switch to them. Meanwhile, coffee retailers have added more meals to build headroom at the expense of the fast-food chains. Two food and drink businesses that were originally very different have thus evolved into competitors. Similarly, some cable and telecommunications companies are finding headroom in their current customer base. They are shifting from being TV or telephone service providers to becoming comprehensive sources of digital, information, and value-added services (by offering home control systems, for example). Their investments in broadband lines, stretching into customers' homes and offices, and their monthly interactions with a broad consumer base (developed over

years of being regulated monopolies) give them a platform for this in-market leverage that is very hard for other companies to compete with. To be sure, these new businesses require strong capabilities in customer acquisition and service, in an industry that has often been accused of ignoring consumer complaints. But some cable and telecom providers, such as AT&T, Verizon, and Cox Communications, are now developing these capabilities to help them enter new lines of business. Determining the size of your headroom in existing markets is a three-step process. First, find gaps between what other companies in the market offer and what customers need, and devise a way to close those "needs-offer" gaps with new or better offers. Second, identify the factors (such as features, incentives, or messaging) that would lead customers to switch to your new product or service. Finally, redeploy, leverage, and improve your capabilities - or, in some cases, add new ones - to close the gap and propel your customers to switch. Needs-offer gaps can be found in any market. Enormous opportunities for inmarket leverage are often hiding in plain sight, accessible to those who can look with fresh eyes at existing customers. One large pharmaceutical company expanded sales by identifying patients who were not taking their medications as frequently as prescribed, and then encouraging them to do so. Video game producers sell additional apps or special in-game bonuses to customers already playing their games. Manufacturers have successfully targeted customers who want more quality at an affordable price (such as those who seek out reviews of more durable appliances), or who want access to features currently available only to top-tier customers (such as smartphone purchasers seeking betterquality built-in cameras). Regional banks have offered customers access to credit with more engagement than global financial institutions could offer. The levers available to close a needs-offer gap include adding or redeploying capabilities. For example, in retail, making incremental improvements in assortment and packaging, increasing access via a new distribution channel, or simply upgrading the customer experience in a way that outpaces competitors' offerings. Amazon's Prime membership is a good example. It doesn't change any of the products Amazon sells, but it offers free two-day shipping on all purchases in return for an annual fixed fee, further leveraging

Amazon's distinctive supply chain capabilities. Near-Market Opportunities When companies think about growth, they often start by looking for "adjacencies" (new nearby markets to enter) that stand out primarily for their market potential. But by rushing to the most seemingly attractive opportunities - the places with hot new technologies or burgeoning consumer populations - they risk diversifying past the point of no return, just as Blockbuster and Smith Corona did. But those high-growth opportunities have probably risen up in response to another company's successful capabilities play, which will be very hard for another company to compete against. A better approach is to look for opportunities where you can leverage your own distinctive capabilities, find new customers for your existing products or services, or apply your strengths to new offerings. Begin with a thorough assessment of your own capabilities and t h e i r r e l e va n c e f o r n e a r- m a r k e t opportunities. A capability is relevant because either it creates a distinctive economic advantage, such as eliminating costs, or it creates a customer-acquisition advantage, helping you capture prospective purchasers. If you don't see that direct relevance, be cautious. Some apparent advantages, such as the ability to offer customers a single bundled source for purchases used together, won't necessarily create real synergies. Summer barbecues may involve the purchase of grills, food, and charcoal briquettes or propane, but it's hard to imagine a manufacturer in one of these sectors expanding successfully to the others, because of the disparate capabilities required for them. In your assessment, give yourself credit for non-obvious strengths that will help you grow. For example, you may have overlooked capabilities you can apply in your operations infrastructure - your sales force, financial back office, or IT system - or your customer insights and logistics network. American Express had exactly this type of asset in its loyalty program, which it originally built to enhance its core business, and then extended into a platform that enabled other companies to offer similar services. When you seek growth in near markets, be wary of stretching your capabilities system so far that the linkage breaks, and your current business model doesn't apply the way you hoped it would. Leading

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STRATEGY AND LEADERSHIP

GROW FROM YOUR STRENGTHS The only sustainable way to capture new opportunities is to remain true to what your company does best.

rowth is the ultimate test of business vitality, yet questions about it haunt business leaders. How much will we grow this year, and beyond? How much growth do we need? What kind of growth do we need? How should we balance revenue growth against margin improvement? How far afield from our current business should we look for new customers? Once we know where we want to be, how do we get there? The best recipe for sustained, profitable growth is simple in its basic concept. It requires a capabilities-driven approach making the most of what you already do well - that goes well beyond traditional market-back approaches, which try to deliver whatever the outside world seems to need. It is also devilishly difficult in its details, because it assumes you will use any means at your disposal to achieve your goal. There 42 | www.cedmagazineng.com October 2015

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need be no trade-off between current markets and adjacent markets, or between organic methods (such as marketing and innovation) and inorganic methods (such as mergers and acquisitions). You can and should blend all of these, ideally in a dynamic and fast-paced way, as long as they are aligned with the proficiency and advantages you already have. Thus, before you pursue growth directly, you should have in place the three elements of a clearly defined, coherent strategy: (1) a value proposition that resonates with customers, supported by (2) a system of distinctive capabilities, combined in a way

Companies that enter new businesses to escape from a weak position generally become weaker still.

that competitors can't match, with (3) a portfolio of products and services that are all aligned to the first two elements. You must also be able to deliver on that value proposition, translating concept into competitive position with a viable, sustainable business model that generates profits and cash flow. You can grow profitably and sustainably only from a position of strength. If your enterprise is struggling to maintain its economic lifelines, then foundational work on strategy, organization, cost optimization, or other factors is needed before any new growth strategy can succeed. Companies that enter new businesses to escape a weak position generally become weaker still, because they move into markets where they lack the capabilities needed to succeed. Typewriter maker Smith Corona, for example, understood the needs of students and self-employed typists better than anyone else; this helped the company develop a successful line of wordprocessing computers in the 1980s. But the company couldn't sustain that business, because its efforts to expand into office supply distribution, kitchen appliances, daisy-wheel printers, and paints had left it without the resources to compete against other types of personal computers. Blockbuster Video sought to protect itself from disruption in the early 2000s by buying Circuit City - an effort to create synergy from two weakened businesses without a clear logic for creating value together. Let's say you have that position of strength to start from: a capabilities-driven strategy and the wherewithal to exploit it. From there, you can chart a course toward sustainable and profitable expansion by combining four approaches to growth: 1. In-market leverage: seeking out new growth opportunities among your existing customers in your core market as currently defined. 2. Near-market expansion: pursuing opportunities in unfamiliar sectors or with new products. This approach is also known as expansion through adjacencies. 3. Disruptive growth: responding to dramatic change with entirely new business models and capabilities if and as appropriate. Though important at times, this is rarer than many businesspeople think and should be undertaken only if you have a clear idea of how to link your existing capabilities system to the new one you will need. 4. Capability development: building distinctive organizational proficiency in a

A NEW CHAPTER UNFOLDS Tanzania begins the construction of largest port in East Africa

anzania has begun the construction of what it says will be the largest port in East Africa at a cost of about $11bn. Backed by China Merchants Holdings International and Oman's State Government Reserve Fund, the project is expected to be a game changer in Tanzania's quest to industrialize. Officials in Tanzania believe that the construction of largest port in East Africa will not only boost the economy of the tourist town, but also put the country in good stead to compete for regional business, especially with neighbouring Kenya. President Jakaya Kikwete who attended the ground breaking ceremony said that the construction of the

Bagamoyo port and a special economic zone is geared at realising the government's goal of bringing about an industrial tranformation in Tanzania. It is expected that the new port will be able to handle 20 million containers annually. It will take two years to complete, and includes building rail and road links. The construction of the port was initially slated for 2014 but has been marred with delays. Shipping agents had opposed the move saying that the port will have no significant impact for the first 20 years after its construction. In June this year, Tanzania Shipping Agents Association said that with the current economic environment in East

POWER SECTOR LEADS Infrastructure decay prevalent in power sector

igeria's power sector continues to experience a dearth in infrastructure almost two years after the privatisation of the generation and distribution segments of the sector, The Punch reports. Some of the post-privatisation investors have been reluctant to invest in the companies they bought, saying the returns on their investment, so far, have been below expectation. Attributing their inaction to financial constraints, some are also of the

opinion that the current electricity tariff structure is not cost-effective. This development has, thus, resulted in infrastructure deficiency, which has confined some of the investors to using old switches, fuses, transformers, cables and so on, of the defunct Power Holding Company of Nigeria (PHCN), without plans to replace them in the short run. However, in February this year, the CBN, in a bid to resolve the liquidity challenges in the power sector, released

Africa they are skeptical that larger vessels can dock in the country in the coming 20 years. However, Tanzanian Transport per manent Secretary Shaban Mwinjaka said all plans were in place to have the port constructed. The construction of the Bagamoyo port in Tanzania will involve several phases. The first phase will be completed in three years' time. Additionally, a 34km road joining Bagamoyo and Mlandizi and 65km of railway connecting the port to Tanzania's Central Line and Tanzania-Zambia railway will be constructed. Tanzania is East Africa's secondbiggest economy after Kenya, and cargo volumes at the existing Dar es Salaam port are expected to rise as much as 25 percent this year to 18 million tonnes. In a move that is set to change ports scene in East Africa, Kenya's Mombasa port is currently being upgraded and it is also constructing a hugeport at Lamu, including an oil refinery near its border with Somalia. But, the new Bagamoyo port construction project is expected to dwarf Kenya's port at Mombasa east Africa's trade gateway about 300 km to the north, and aims to capitalise on growth in a region seeking to exploit new oil and gas finds

a total loan of N18.26bn to five power firms. The amount which was given at an interest rate of 10 per cent, with a repayment period of 10 years, is part of the N213bn Nigerian Electricity Market Stabilisation Facility. There are also indications that some of the privatised power firms are still on the lookout for loans within and outside the country to boost the status of their networks as well as contemplating getting listed in the Nigerian capital market. You are at:Home"More"Business & Finance"French Development Agency to grant FG funds for power sector www.cedmagazineng.com October 2015 | 7

ENVIRONMENT

CONSTRUCTION UPDATE

EYE ON THE PIE US firm now eyes construction market in Kenya

he construction market in Kenya is set for cutthroat competition after X-Calibur Construction Chemistry Inc., a US-based construction products m a nu f a c t u r e r s a i d t h a t i t wa s constructing a concrete and cement additive manufacturing plant in Kenya aiming to tap on the wider East African region. The firm said that it would open a manufacturing plant in Nairobi late next year in a move to ease distribution of its products across the East African market. X-Calibur managing director Brian Davies said that they will mainly concentrate on concrete admixtures

INCORPORATING

OIL AND GAS REPORT

Construction and Engineering Directory 2015/2016

8 | www.cedmagazineng.com October 2015

adding that the raw materials were on the way to Kenya. The on concrete admixtures manufacturing plant with projected capacity to produce approximately one million litres of concrete and cement additives is awaiting manufacturing approvals relevant authorities such as Kenya Bureau of Standards before starting operations. Admixtures are used to boost concrete strength and helps in workability retention. Mr Davies said X-Calibur also plans to install a sand drier in its plant still under construction along Mombasa road to

blend local sand for use in making industrial floor products. "We are looking to purchase a parcel of land for storage of sand. We are still yet to make a decision on the sand drier but we are seeking to cut on importation cost of processed sand to this market," said Mr Davis. The company has already started investing heavily in enhancing local human resource to enhance capacity in concrete technology and construction. X-Calibur also plans to train University of Nairobi's civil engineering graduates through its Engineers for Africa initiative geared towards having technical skills on the project. "Construction courses in Kenya are pretty good especially in finishing, but we have realized some weakness in concrete technologies applied in this market. We believe more can be done" Davies. X-Calibur enters the construction market in Kenya when there is booming construction activities in the country shooting up demand for admixture and concrete.

South Africa and believes that concentrated focus on renewable energy is the key to alleviating poverty and addressing the developmental needs of the country," Safcei spokesperson Liziwe McDaid added. "The Russian nuclear agreement contains specific clauses that could have potentially devastating consequences for South Africa. These include that South Africa will be liable for any environmental incidents, including radioactive accidents, and any resultant economic consequences, while Russia will not have any liability. "It also states that South Africa cannot procure nuclear services from any other entity without the consent of Russia," she explained. Zuma and Joemat-Pettersson were required to respond to the application within ten days. Adrian Pole Attorneys, assisted by the Legal Resources Centre, were assisting Safcei and Earthlife.Environmental groups take govt to task over nuclear secrecy

600 MW of electricity, at a cost potentially exceeding R1-trillion.

Environmental justice organisations Earthlife Africa and Southern Africa Faith Communities Environment Institute (Safcei) have taken to the courts to force government to make public its nuclear plans and follow a "fair and transparent" process in pursuing its nuclear ambitions. The parties this week issued an application in the Cape Town High Court against Energy Minister Tina JoematPettersson and President Jacob Zuma, with the National Energy Regulator of South Africa, the Speaker of the National Assembly Baleka Mbete and the chairperson of the National Council of Provinces Thandi Modise also cited for their involvement in the matter. As South Africa pursued one of its largest procurements, the Minister stood accused of failing to initiate the necessary processes ensuring that any potential nuclear procurement deal was lawful, fair, equitable, transparent, competitive and cost-effective. Addressing media in Johannesburg on recently, Earthlife and Safcei said they had faced many stumbling blocks attempting to obtain further information on the procurement process of up to eight nuclear power reactors to generate 9 www.cedmagazineng.com October 2015 | 41

INFRASTRUCTURE UPDATE

ENVIRONMENT

TRANSPARENT CONDUCT Environmental groups take govt to task over nuclear secrecy

nvironmental justice organisations Earthlife Africa and Southern Africa Faith Communities Environment Institute (Safcei) have taken to the courts to force government to make public its nuclear plans and follow a "fair and transparent" process in pursuing its nuclear ambitions. The parties recently issued an application in the Cape Town High Court against Energy Minister Tina JoematPettersson and President Jacob Zuma, with the National Energy Regulator of South Africa, the Speaker of the National Assembly Baleka Mbete and the chairperson of the National Council of Provinces Thandi Modise also cited for their involvement in the matter. As South Africa pursued one of its largest procurements, the Minister stood accused of failing to initiate the necessary processes ensuring that any potential nuclear procurement deal was lawful, fair, equitable, transparent, competitive and cost-effective. Addressing media in Johannesburg on recently, Earthlife and Safcei said they had faced many stumbling blocks attempting to obtain further information on the procurement process of up to eight nuclear power reactors to generate 9 600 MW of electricity, at a cost potentially exceeding R1-trillion. 40 | www.cedmagazineng.com October 2015

"Notwithstanding the vast sums of money to be committed and the potentially long-term effect on the economy, for consumers of electricity and present and future generations of South Africans, the decision to proceed with procuring these nuclear power plants, and to have concluded such procurement in the next few months, has occurred without any of the necessary statutory aEnvironmental groups take govt to task over nuclear secrecy Environmental justice organisations Earthlife Africa and Southern Africa Faith Communities Environment Institute (Safcei) have taken to the courts to force government to make public its nuclear plans and follow a "fair and

Energy Minister Tina Joemat-Pettersson

transparent" process in pursuing its nuclear ambitions. The parties recently issued an application in the Cape Town High Court against Energy Minister Tina JoematPettersson and President Jacob Zuma, with the National Energy Regulator of South Africa, the Speaker of the National Assembly Baleka Mbete and the chairperson of the National Council of Provinces Thandi Modise also cited for their involvement in the matter. As South Africa pursued one of its largest procurements, the Minister stood accused of failing to initiate the necessary processes ensuring that any potential nuclear procurement deal was lawful, fair, equitable, transparent, competitive and cost-effective. Addressing media in Johannesburg on recently, Earthlife and Safcei said they had faced many stumbling blocks attempting to obtain further information on the procurement process of up to eight nuclear power reactors to generate 9 600 MW of electricity, at a cost potentially exceeding R1-trillion. "Notwithstanding the vast sums of money to be committed and the potentially long-term effect on the economy, for consumers of electricity and present and future generations of South Africans, the decision to proceed with procuring these nuclear power plants, and to have concluded such procurement in the next few months, has occurred without any of the necessary statutory and constitutional decisions having been lawfully taken," said Earthlife senior programme officer Makoma Lekalakala. Now the parties planned to challenge the legality and constitutionality of the intergovernmental agreement on strategic partnership and nuclear cooperation signed with Russia last year, as well as the provision assuring the agreement was binding on the international plane without the need for Parliamentary ratification. Besides Russia, South Africa had inked interg over nmental ag reements surrounding the nuclear procurement programme with France, China, the US and South Korea, the latter two of which were deemed "outdated". "Safcei believes this new nuclear power poses unacceptable environmental, social and economic risks to the people of

NIGERIAâ&#x20AC;&#x2122;S RAIL NIGHTMARE In the comity of nations with annual GDP in the range of $500 billion, Nigeria is probably the most backward country in rail development.

igeria is indisputably the largest economy in Africa. Its gross domestic product (GDP) has beaten South Africa to the first position on the continent. But in terms of infrastructure development, Africa's largest economy is no match for South Africa. With a population of 170 million, Nigeria is still struggling with 4,000 megawatts (mw) of electricity. That keeps the country in darkness most of the time. South Africa on the other hand, generates 40,000mw of electricity for a population of 53 million people. The two countries are worlds apart despite the larger size of Nigeria's economy driven largely by population explosion. In the comity of nations with annual GDP in the range of $500 billion, Nigeria is probably the most backward country in rail development. It runs most of its land transportation system on roads. The country's rail system is archaic and dilapidated. Intracity commuters depend on thousands of rickety mini buses for their movement. During the 2015 general elections campaign, former President Goodluck Jonathan flaunted the rehabilitation of the rail system as one of his biggest

achievements. His wife, Patience said that when her children insisted on knowing how trains looked like, she took them to London because there was none in Nigeria. She however boasted that her husband had reactivated the rail system. Despite all the noise about rail rehabilitation during the Jonathan administration, Mrs. Jonathan and her children cannot board the train they bequeathed to Nigerians. The Jonathan rail revolution added 29 old-fashioned locomotives and some wagons to the rail system which had

Engr. Sijuade

been in comatose for more than 10 years. Former President Olusegun Obasanjo recently wondered why someone would rehabilitate a rail system with obsolete locomotives. The Nigerian Railway Corporation (NRC) needs a minimum of 500 locomotives and 2,000 wagons to reduce the chaos and senseless slaughter on Nigerian roads. The unholy concentration of land transportation systems on road claims scores of lives on daily basis and shortens the lifespan of Nigerian roads. The Dangote Group, which manufactures and distributes cement, flour and sugar maintains a fleet of 4,000 trucks to get its goods to different parts of the country. They pound the roads mercilessly with excess loads. On a frenzied day, one could count up to four Dangote trucks involved in road mishaps, with lives lost in some cases. What Dangote is doing with 4,000 trucks at huge economic cost and human casualties on the roads could be done with few locomotives and wagons at minimum cost and maximum safety. Haulage of refined petroleum products is done mostly on roads. The consequence of that is calamitous. Fuel tankers driven by hemp smokers often over-turn, set houses ablaze and claim scores of lives. Fuel haulage is safer on rail. Unlatched containers on flat bed articulated trucks have on several occasions slipped off the trucks and crush vehicles and their passengers. That cannot happen on rail. The traffic gridlock on Apapa Road in Lagos would persist even if the road is wider and devoid of craters. The road leads to the busiest port in Africa's largest economy. With the railway still limping, all the containers from Apapa port hit the road on the back of ill-maintained flat bed trailers. The roads cannot contain them. The colonial masters laid rail tracks right down to the ports for the evacuation of imports and exports. The rulers of Nigeria systematically shut down the rails and diverted the goods to dilapidated roads. That was the beginning of the mindless slaughter on

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INFRASTRUCTURE UPDATE

DEVELOPMENT

STILL GOING ON STRONG Rail mass transit construction project in Nigeria on track

the roads. The federal government could reverse that trend by giving rail rehabilitation the attention it deserves.Mrs. Jonathan was rich enough to take her children to London to see train. Thousands of parents in Akwa Ibom and Cross River states do not have the financial muscle to transport their children to Aba or Port Harcourt where they could see a train. Aba is more than 300 kilometres from Ikom in Cross River State. Ironically, that is the nearest a child in that community could travel to see a train. Any adventurous tourist, who insists on going to Lagos by rail from Uyo, would have to board a train at Aba and head first to Kano in a 24-hour journey on rail. From Kano he would be routed to Lagos in another long haul that may last 20 hours. There is no rail link between eastern Nigeria and the west. The construction of that link has been neglected for years at the expense of precious lives and the shortening of the lifespan of the few roads available. The federal government is currently too broke to fund the massive investment needed to develop the rail system to the level that would reduce the carnage on the roads. The option is to let the private sector into the system in a joint venture that would ease the financial burden on government and ensure an efficient running of the system. Unfortunately, the rail system is still managed under laws enacted in 1955. The National Assembly has debated a new Railway Act for several years now. That Act must be passed to open the way for private sector funds to develop the rail system. 10 | www.cedmagazineng.com October 2015

he construction of the Lagos Rail Mass Transit construction Project in Nigeria is in good progress. Also known as Blue Line project, the project is expected to ease transport need of the fast growing population in Lagos.The project construction is being supported by the government of the United Kingdom. London mayor Alderman Alan Yarrow led a team of London business delegation on a round-table meeting to discuss the progress of the project. The meeting was also attended by the Lagos Metropolitan Area Transport Authority (LAMATA) officials. One of the strategic master plan

Dayo Mobereola.

transport project to be implemented in the coming 20-30 years is the Blue Line project. The project plan is estimated to cost US$20bn on six rail lines; 14 BRT lanes; three cable car projects; 20 waterway routes and one mono rail. The Rail Mass Transit construction Project in Nigeria will involve 11 stations, 27.522km rail track from Okokomaiko to Marina. Phase I of the project is anticipated to have engulp US$1.12bn for the 7km covering 2miles to the National Arts Theatre has been completed. However, Phase II of 5km has already commenced from National Arts Theatre to Marina. According to Dayo Mobereola, the LAMATA Chief Executive Officer clarified that the delay was due to funding issues and that is why the State Government is currently pursuing potential investors into the capital intensive project. Lagos can successfully be transformed into a city of infrastructural development for easy transportation of persons and goods. This can easily be achieved through the implementation of the rule of law in the city ensuring the right contracts are in place.

example, three of the eight MDGs addressed health needs: reversing the spread of HIV/AIDS, malaria and other killer diseases; improving maternal health; and reducing child mortality. Yet a single goal out of the 17 SDGs dwarfs these three MDGs combined. SDG 3 is to ensure healthy lives and promote well-being for all at all ages. Within SDG 3 are 10 targets, of which only one takes on "universal health coverage, including financial risk protection, access to quality essential health care services and…affordable essential medicines and vaccines for all." Funding such a target, in contrast to concentrating on a single disease or funding vaccination campaigns, almost certainly will require user-financed health insurance schemes. But incomes and the degree of participation in formal work sectors are so low across the developing world that considerable prog ress on SDG 1 (pover ty eradication) and SDG 8 (inclusive and sustained economic growth and decent work for all) would appear to be prerequisites for SDG 3 achievement. Also to be considered is the sheer extent of the infrastructure required to meet the health goal, in terms of clinics, hospitals, training schools, pharmaceutical production facilities, and others. With health care funding on the decline after an MDG-related string of successes, considerable expansion in investment by large-scale health care companies will be required. Higher average incomes would most likely increase gains by building a more lucrative market. Fortunately, many health care firms practicing corporate sustainability, which says social and environmental well-being pays off in increased revenue opportunities and business stability, have been developing publicprivate partnerships. Public partners include but are not limited to global United Nations initiatives on vaccines and on maternal and child mortality. Nevertheless, examples from the United States indicate the scale of the challenge ahead. If the world's largest

economy is still experiencing challenges in expanding its health insurance

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DEVELOPMENT

PRACTICE

Workers take measurements while laying the tarmac on a new road being built near Arusha, Tanzania. Africa needs funds for such development projects. Panos/Frederic Courbet

FUNDING THE PLANETâ&#x20AC;&#x2122;S FUTURE Will the billions required for the SDGs be sustainable?

s the Millennium Development Goals expire towards the end of this year, world leaders will gather at the UN headquarters in New York in September to launch the post-2015 development blueprint, the Sustainable Development Goals (SDGs). The cost of implementing the SDGs is expected to run into trillions of dollars spanning over 15 years. To address the issue, global leaders are holding a financing for development conference in Addis Ababa, Ethiopia. The delegates at the Third International Conference on Financing for Development in Addis Ababa will discuss how to finance global sustainable development goals, forecast by the UN Conference on Trade and Development (UNCTAD) to cost $2.5 trillion a year over the next 15 years. The biggest challenge humanity faces today is how to achieve a minimal level of prosperity and well-being while protecting the planet at the same time. The Sustainable Development Goals 38 | www.cedmagazineng.com October 2015

(SDGs), drafted by the UN General Assembly and up for approval this September, are a 15-year, 17-point plan for achieving what could be described as the Millennium Development Goals (MDGs) plus peaceful and inclusive societies plus economic capacity and infrastructure. In the midst of this swirl of pressing global needs is the ever more present visage of climate change, which has now been allocated its own

This is not the first time that world leaders have convened to consider financing for development (FfD), or how to raise money to fund projects that will improve global welfare. The first UN summit on financing for development took place in Monterrey, Mexico, in 2002. The impetus came from developing countries, many of whom had experienced crippling financial crises only a few years earlier

goal in the SDGs lineup. This is not the first time that world leaders have convened to consider financing for development (FfD), or how to raise money to fund projects that will improve global welfare. The first UN summit on financing for development took place in Monterrey, Mexico, in 2002. The impetus c a m e f r o m d e v e l o p i n g countries, many of w h o m h a d experienced crippling financial crises only a few years earlier. Moreover, levels of official development assistance (ODA) had stagnated following a sharp slump at the 1992 conclusion of the Cold War. The question these countries raised was: given heart-stopping volatility in financial flows and the paucity of development assistance, exactly where were the resources to finance their development to come from? The Monterrey answer appears to have worked well. Between 2002 and 2015, ODA increased by two-thirds in real terms in the wake of Monterrey donor pledges; annual levels of foreign direct investment (FDI) have roughly doubled and in some years quadrupled, with developing countries now taking the lion's share of incoming flows; and shored-up finances meant that the next global crisis to occur originated in the developed North, not the developing South. Progress on the MDGs gained momentum, and the rate of extreme poverty in developing countries was cut in half by 2010, five years ahead of schedule, according to the United Nations. The task before the Addis Ababa gathering, however, looks bigger. For

enhanced brand value and higher levels of staff and customer satisfaction. The profession must campaign to promote these skills that deliver huge value to clients over many years and underpin the sustainability of client organisations. 3. Competition Competitions is a norm in any kind of business but with the arising number of architecture firms in Africa there is more competition in winning even simple tenders.

THE PRACTICE CHALLENGE Top 5 challenges facing architects in Africa

s construction industry in Africa continues to grow the demand for quality architects is on the rise too. The two goes hand in hand. However enormous challenges continues to affect architects in Africa. As a great writer in the construction topics I have interacted with many architects in Africa and we analysed the common problems they are facing in their day today activities in Africa. Most African architects have been staring into the headlights for far too long. It's time to use those headlights to illuminate our future and to change the conversation. Let's reconsider the role and importance of our profession and explore how to work together to secure and expand our critical role in the future of the built environment. 1. The architecture profession is in transition Yes where you left your profession ten years ago is not the same you will find today therefore what you knew in the last few year is not the same you will know in the current times.

The first digital natives are entering the workforce, with high design aspirations but lacking the necessary knowledge to detail, direct and coordinate. Fee pressures can mean that older architects simply don't have time to provide an apprenticeship. In the current construction works, bright ambitious designers are striking the industry and they are using fabulous tools. Therefor profession needs to provide clear career progression, structured experience and comprehensive skills development to allow for mobility for individuals and flexibility for the organization as a whole. 2. Improving business outcomes for clients Competitive environments affect corporations, healthcare service providers, educators and retailers alike and the costs of assets and operations are increasingly scrutinized. Architects are recognised for their ability to translate requirements into solutions that demonstrate higher productivity,

4. Specialisation Regardless of scale, being expert at one or a few selected building typologies is a way of remaining an architect of choice. This means gaining a deep understanding of that client's imperatives, whether commercial, operational, pedagogical or model of care. Quality design is a more fluid skill and must integrate with both the local site conditions and with the sector specialist requirements. Building a reputation in a particular typology not only builds brand and market, but also opens up the potential for higher levels of efficiency. This efficiency can take the form of object libraries/families, room data sheets, planning modules, standard details and knowledge of codes. 5. Earlier contractor involvement Contractors are becoming involved in the procurement process earlier and earlier, as clients seek to shift risk through PPP, D&C and other forms of packaged procurement methods. Such packaging works best if the client brief has been clearly articulated and if the client continues active involvement in the design process. There is a major role for architects, as specialists, to work with clients to develop such a robust and flexible brief and to assist the client with ongoing independent monitoring. At best, early contractor involvement can result in a more holistic approach, tap into a more diverse range of skills and solutions and enhance the overall knowledge of our professionals. www.cedmagazineng.com October 2015 | 11

DEVELOPMENT

NEWS EXTRA

GETTING THE PROJECT RIGHT FG to review Second Niger Bridge contract after detecting errors

he Federal Government has said it is reviewing conditions and issues around the second Niger bridge in order to correct some observed anomaly in the contract for the project. The government specifically pointed out community issues and contract sum as part of its apprehensions on the contract. The Director-General of the Infrastructure Concession Regulatory Commission (ICRC), Aminu Diko, who spoke with State House correspondents after making presentations to President Muhammadu Buhari at the Presidential Villa, Abuja recently, said that The Ministry of Works had been asked to review the cost of the project. He said, "The second Niger bridge is one of the projects that we discussed with the President. We have been discussing the transaction with the Ministry of Works. But before it can be finalised, the commissioner has to give a certificate of compliance, but we haven't given that because we have seen a lot of issues that we are uncomfortable with. "We are talking with the Ministry of Works for them to correct it. The communities around that area are 12 | www.cedmagazineng.com October 2015

clamouring that their lands have been taken and that they have not been compensated adequately. "As a matter of fact, we got a letter from Onitsha Traditional Council complaining that they have not been adequately represented in this transaction. These kind of issues we are not saying that something has not been done properly but we need to be convinced that these few problems are sorted out properly. "We will also talk about the actual cost of the bridge. Eventually, we have asked the Ministry of Works to review it and justify how much the project should cost." The Director General was evasive on the specific question of the status of the project. But he assured that the government is seriously working to deliver on the project which is of critical importance to Nigerians from the eastern part of the country. According to him, "I have no idea about the status of the project. What I need to tell Nigerians is that PPPs take a long time to mature. There is a difference between the project which you have

money in your pocket or in your account and you just bring it out and tell somebody to go and do it. "But when it is PPP transaction, you first engage a number of people. You have banker, lawyers, engineers. They all collaborate to form consultancy for that transaction. "For the second Niger bridge there will be a lot of studies that need to be done on the integrity of the bridge itself which will take time. It is not something we can see being completed in the next six months. "I will like us to be patient about it, we know that it is a critical road. We also know how Nigerians suffer during festive holidays and we hear people sleep on that old bridge. The time has come for us to bring succour to Nigerians." He said that mission of the Commission to the Villa was to tell the President about the imperative of PPPs in nation building. "Unfortunately, we realised that we were coming to preach to the converted because only on Sunday the President was at the NBA conference where he made a profound statement regarding infrastructure deficit in Nigeria. The government cannot do it alone. "So the private sector both in and outside the country must be accepted as a partner in progress, provided that the nation will not be shortchanged in anyway. Private sector will be allowed to invest in the country and recuperate their investments and ICRC will be there to guide ministries department and agencies on how to structure these transactions and when it is properly signed and executed we will also take custody of those agreement to ensure that there is total compliance." He also said some of the limitations of the Commission were also discussed with the President. He added: "One of which is the most significant is the law that we operate. It is very ineffective. So, we have proposed an amendment to the law and he has agreed to support the passing of the bill when it comes back to him from the AttorneyGeneral's office. "We also discussed some of the legacy concession that we inherited, the port terminals the one at Lagos International Trade Fair, the one over Tafawa Balewa

income products. Since then, the World Bank has continued to raise a lot capital for projects that seek to mitigate climate change in developing countries or seek to help affected people adapt to it. So far, Tunisia has received a loan of over $30 million to promote better water management by using the country's irrigation and drinking water more efficiently, while Morocco has successful applied for funds to build North Africa's biggest solar power plant in an effort to curb its reliance on coal and other fossil fuels. To date, the bank has issued the equivalent of $8 billion in green bonds through more than 90 transactions in 18 currencies.

cars. During the same period, the global consumer goods company Unilever

Socially responsible investors Climate change is presently one of the greatest challenges confronting the developed and the developing world, warns the African Development Bank (AfDB), which set up a green bond programme in 2013. Without a concerted effort to reduce greenhouse gas emissions, echoes the International Finance Corporation, an affiliate of the World Bank, the earth's temperatures could rise considerably within this century. In order to keep global temperatures below 2 degrees Celsius as agreed by negotiators during the United Nations Framework Convention on Climate Change (UNFCC) negotiations. Business editor and author Mark Gunther, in the Yale Environment 360 online magazine, questions whether green bonds could "bankroll a clean energy revolution" and is uncertain where the money would come from. In a sense, he argues, green bonds are the latest example of "themed bonds for a specific purpose " pointing to the 1862 civil war bonds that helped finance the US army and World War II bonds sold by celebrities at the time. With the market raking in billions of dollars a year, it seems the appetite for these new debts is growing as well as the emergence of new types of issuers as evidenced by the case of Johannesburg. In March 2014, corporations like Toyota joined the fray to fund consumer loans for electric and hybrid www.cedmagazineng.com October 2015 | 37

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DEVELOPMNET

stewardship and climate change." A bond is a type of loan or an IOU which companies, governments or banks use to finance projects. The issuer is obliged to pay back the debt within a time agreed and with a certain interest. What warrants the "green" label is that the proceeds are allocated to climate and environment-friendly projects. By issuing this type of bond, Johannesburg became not only a pioneer in Africa, but also within the C40 Cities Climate Leadership Group, a network of megacities sharing best practices and feasible solutions to changing weather patterns.

Solar panels being cleaned at the Ain Beni Mathar Integrated Combined Cycle Thermo-Solar Power Plant in Morocco. Photo: World Bank/Dana Smillie

AFRICAâ&#x20AC;&#x2122;S GREEN INITIATIVE New bond issue set to help Africa go 'green' - A way of bankrolling a clean energy revolution

ohannesburg, or Jozi, as it is affectionately known, is the largest commercial hub on the continent, attracting millions of visitors each year, including students, artists and business leaders. Its population of about 4.8 million people is projected to grow to 6.5 million by 2040, according to the World Population Review. Faced with this record growth and its foreseeable impact on the city's aging infrastructure and social services, Johannesburg's Executive Mayor Parks Tau gave a nod to a greener path for development in his 6 May 2015 State of the City address. Among the promised innovations he listed were low-flush toilets and water-saving urinals to become a standard feature in Johannesburg homes, offices and commercial sites, alleviating the pressure on the city's scarce water reserves. Organic waste is to be harvested for fuel and energy, and solar heaters and smart metres installed to reduce the c o n s u m p t i o n o f e l e c t r i c i t y. Furthermore, to lower pollution, he hopes to reduce the commuters' 36 | www.cedmagazineng.com October 2015

reliance on private vehicles in favour of walking and biking. The mayor also promised to improve the public transport system and switch to diesel fuel to lower the city's carbon footprint. To finance these initiatives, the city auctioned its first ever "green bond" on the Johannesburg Stock Exchange (JSE) last June. The bond, which is worth $143 million and is expected to mature in 2024, was 150% oversubscribed - a success! In a speech delivered shortly after the listing of the bond, Mayor Tau said it was a clear demonstration of "investor confidence in the City of Johannesburg and commitment to environmental

A bond is a type of loan or an IOU which companies, governments or banks use to finance projects. The issuer is obliged to pay back the debt within a time agreed and with a certain interest. What warrants the "green" label is that the proceeds are allocated to climate and environment-friendly projects.

Green bond allure Green bonds are not different from conventional bonds in their pricing. Much of their allure lies in the fact that investors feel they are being "socially responsible" and that they are having a positive impact on the environment. According to the World Bank's senior sustainability advisor, Laura Tlaiye, investors are increasingly recognizing the threats environmental degradation and climate change can create for longter m financial value, and are considering it when they choose their investments. At the same time, investors are also drawn to these fixed-income green loans that promise regular returns and a full refund of the principal amount once the bond has matured. And in the case of the World Bank, one of the largest financiers for climate-smart projects in developing countries, their bonds bring triple "A" ratings, indicating they are extremely safe and low-risk. But as the market expands, so does the need for more clarity on how the capital raised is used. International institutions providing development f i n a n c i n g , l i ke t h e E u r o p e a n Investment Bank (EIB), were the first to enter the green bond market in 2007. A year later, the World Bank joined forces with the Swedish financial group, Skandinaviska Enskilda Banken AB (SEB), to respond to a demand by Scandinavian pension funds looking to invest in environmentally friendly fixed-

square and the Lagos-Ibadan expressway. "We also discussed all the projects that were started under the ICRC Act - one of which is the second Niger Bridge, the National Theatre complex, Lagos. These are important projects to the country and in addition to that this country is proposing to build three deep sea port for Nigeria with combined estimated cost of about $6 billion. "So, you can imagine the kind of opportunities it can create as far as job creation is concerned and as far as vibrancy of the economy is concerned. "So, we are reviewing these proposals, with the Ministry of Transport and in due course we will come out with a position on that." He stated He said Buhari gave the Commission two directives. His words: "He gave us two directives, especially on agricultural silos. We did tell the President that this nation has already built about 33 agricultural silos that is spread all over the country but government has sunk in money there and the management of those silos will be granted to the private sector.

Mr. Aminu Diko "What the President has directed is that we should involve the state governors to see how best they can encourage their farmers to utilise these silos when they come into effect. "He also addressed another issue which is very important. ICRC regulates how public private partnership transactions

NEW INITIATIVE ON POWER Timber firm plans to construct biomass power plant in South Africa

imber firm- York Timbers, has announced plans to construct an electrical biomass power plant in South Africa at its timber plant worth US $0.10bn. This new power plant by the firm will

deliver 25MW into the South African National grid thus giving the company some energy income from what would otherwise be discarded as biomass waste production from its six timber plants. According to the CEO of York Timber,

come in to being, but before they come in to being they have to be developed. "ICRC does not develop projects and also does not give funding for the development of the project. So, the President directed that MDAs should ensure that they have adequate funding for development of project in their budgets and if they don't, they should look for alternative ways of getting such funding. "We acknowledge that some of the developments institutions have already begun to grant Nigeria such attention. Recently, the African Development Bank offered to finance the engagement of a transaction adviser for the Nigeria TransSahara gas pipeline that Nigeria is building, which is part of the African Heads of Government commitment to develop Africa in general. "World bank has also given some facilities to Nigeria some of which could be used for project development and capacity building for relevant MDAs. So, the complexities of the transactions can be tackled head on."

Pieter van Zyl, the power plant project would also help diversify the earning base of the lumber, plywood, wholesale and plantation providers. It would also help the company participate in the forth bid window of the Department of Energy's Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) which will close in November 11. Van Zyl also noted that the company will strengthen its earnings before interest, taxes, depreciation, and amortization, generating capability while at the same time diversifying its earnings and extract increased value from biomass production. To aid the company participate in the empowerment-conscious REIPPPP, York created a ring fenced company named York Timber Energy which would be 25 percent owned by the local community and staff through a trust fund while the remaining 75 percent will be owned by the parent company. Van Zyl further noted that the biomass power plant in South Africa will incorporate Austrian technology and it will give them 10 to 20 years of predicted cash flow.

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COVER FEATURE

HOUSING

One of the key results of Africa's housing crisis is the degradation of human dignity as the population is pushed to the informal settlements where water and basic necessities are scarce.

"Economic development is based on industrialisation, and the inputs for development of infrastructure, agriculture, environmental protection a provision of services are provided by industrialisation,"

ENGINEERING AND ECONOMIC PROSPERITY

consulting engineer, Engr. Otis Anyaeji, has said that for the country to become industrialised, engineering innovations must be improved and acted upon by the government.

Engineering, key to Nigeria's industrialisation 14 | www.cedmagazineng.com October 2015

Anyaeji, who spoke on 'Engineering and economic prosperity' at the third Nigerian Construction Industry Hall of Fame induction ceremony in Lagos, said engineering stipulations and

innovations needed to be objectively and economically determined in implementing both the Vision 20:2020 or its equivalent, and the National Integrated Infrastructure Master Plan. "Economic development is based on industrialisation, and the inputs for development of infrastr ucture, agriculture, environmental protection a provision of services are provided by industrialisation," he said. He added that the country also needed capabilities and skills to identify

250,000 thousand housing units deficit per annum. Other initiatives in Kenya were reviewed when it was announced that the government will begin the production of Appropriate Building Materials (ABMT) by building a regional center for ABMTs to capitalize on hydraform technology, a technique that has gained popularity in South Africa. The Ministry of Housing said it would set up a regional ABMT in Mavoko, Machakos County, 9 provincial centers and centers in 52 constituencies around the country. Appropriate Building Materials and Technologies (ABMT) do not only lower cost of construction but are also safe, environmental-friendly to use-and result in high-quality structures that also reduce construction time. In Uganda plastic wastes are being recycled to make floor and roof materials. Elsewhere, the Niger government is financing low-cost housing through Sari Koubou Project. The Infrastructure Development Bank of Zimbabwe (IDBZ) is planning to raise US$100 million to help build low-cost houses across the country. One of the key results of Africa's housing crisis is the degradation of human dignity as the population is pushed to the informal settlements where water and basic necessities are scarce. This young urbanites have in recent years become restless resulting in flare-ups and clashes that can be in part attributed to frustrations at their living conditions. Politicians need to address this housing crisis with a long term view if they are to successfully alleviate it and not cosmetically attend to it and leave the problem to successive governments as they short term projects that give better political mileage.

AFRICAâ&#x20AC;&#x2122;S HOUSING CHALLENGE Construction firm Dorra announces plans to build 10,000 houses in Egypt

onstruction firm Dorra Group has announced plans to construct 10,000 residential houses in Egypt in a bid to tackle the current demand for housing in the country. Managing director Omar Dorra said they intend to target the youth in their housing projectl. He said that they recently submitted a request to the Ministry of Housing to develop a residential project for youth and middle income persons. "We have not yet received official feedback from the ministry on this, but we are confident that we will hear from them soon in an official capacity, because we are ready and eager to begin right away," he said. The company has been eyeing construction projects in Egypt and they had previously developed and constructed a youth project, which

offered around 2,000 housing units that were spread over approximately 168,000 sqm. The director however added that they will work on the construction project once they green light the ministry soon since they have fulfilled all ministerial requirements, including client paperwork for people who satisfied the youth housing requirements. Dorra revealed that the total built up area expected from the 10,000 units, with an average size of 100 sqm per unit, will equal to approximately 1m sqm. Dorra pointed out that after receiving the required permits and licences, the company would need two years to complete the project. The construction of residential houses in Egypt will be a major boost in a country that is struggling with an ever increasing h o u s i n g deficit.

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COVER FEATURE

HOUSING

the cost of building materials placing most homes out of reach for most of Africa's would be first time home owners. Transport systems A look at most developed countries shows a direct correlation between the development of good roads and rail transport as a key ingredient to providing housing in the suburbs where prices will be lower given the lower demand for land. Currently African cities have poor transport facilities which forces the working population to stay close to the cities if they have any hope of getting to and from work in under 2 hours courtesy of massive traffic snarl ups. The consequent high demand for land around the cities pushing housing prices up. Government policies In some countries government policies relating to land make home ownership a very expensive affair that can take up a large slice of the actual house price. Nigeria is a good example where extreme over-regulation and land ownership systems means that up to 20% of the house cost goes towards paying for regulatory costs. Mortgages 34 | www.cedmagazineng.com October 2015

The World Bank points out that in subSaharan Africa only 3% of the population can afford a mortgage and the emphasis is a mortgage for the current house prices on offer. It follows that lower house prices would result in a higher percentage of the population being able to afford the houses. Additionally put simply housing finance instruments need to become more responsive to the buying ability of normal households as is the case with Alternative building Technologies There is no double that the wider adoption of more contemporary technologies will yield greater success in the battle to lower house prices. Sticking to the traditional brick and mortar for its sake will continue to ensure that house prices remain out of reach of the vast majority of households. Despite the enormous challenges facing the adoption of ABTs, some

There is no double that the wider adoption of more contemporary technologies will yield greater success in the battle to lower house prices. Sticking to the traditional brick and mortar for its sake will continue to ensure that house prices remain out of reach of the vast majority of households.

countries have embraced this technology in their housing projects. In South Africa for instance, Moladi Building Technology has completed a number of affordable housing projects using the reusable modular plastic formwork known as Moladi where brick-less walls are built by pouring mould (mortar - stone-less concrete and a special concrete additive) onto the formwork -which is then removed and reused up to 50 times hence lowering construction costs. The technology is being promoted in a bid to deliver 1.5 million new homes by 2019. The project is being boosted by banks, mining companies, and developers, who will give a contribution of $20 billion in five years for the project. The Social Contract for the Development of Sustainable Human Settlements project will help transfer skills to locals for mass production. "Once labourers construct three houses using this system they will master the use of the technique. We use local workforce to construct this sample houses," explains Yang while showing off a prototype, adding that most materials can be sourced locally. The South African technology has been unveiled in Nigeria which has a housing deficit of 17 million units. In Kenya, International Green Structures (IGS) is using compressed agriculture fiber as a basis for their lowcost prefabricated housing technology solutions. "The technology itself is called compressed agriculture fiber. It began in the 1940s and was originally patented in Sweden and developed in the UK and was utilized in housing where a many houses were rebuilt in Europe using this technology," said Richard China. Another technology being used in Kenya is known as expanded polystyrene panels (EPS). The technology uses cheaper materials than conventional stones, yet they are strong enough to withstand a bullet and improvised explosion devices attacks. It is expected that the emerging innovations would help reduce the

possible sources of related technologies such as design and engineering firms, small and medium-sized enterprises, and research and development institutes, among others Eighteen distinguished professionals from the built e nv i r o n m e n t s e c t o r i n c l u d i n g engineers, architects, sur veyors, builders and estate surveyors and valuers, were inducted into the Nigeria's Construction Industry Hall of Fame at a well attended ceremony in Lagos. Besides, two corporate organizations including O.T. Otis Engineering Limited and Advanced Concrete Technologies Limited were also inducted at the 3rd edition of the Construction Industry Hall of Fame 2015 organised by Century 21 Systems Communication Limited, publisher of Construction and Engineering Digest (CED) Magazine. Among the individuals honoured were Engr. (Dr.) Joseph Folayan, Engr. Olumuyiwa Ajibola, Engr. Kashim Ali, Engr. Charles Akindayomi, Alabo Dagogo Fubara, Engr. Ayo Akideinde, Arc. Jerry Ugokwe, Engr. George Okoroma and Surv. Joseph Agbenla. Others are Surv. (Dr.) Bosun Ayinde, ENgr. John Okodi-Iyah, Engr. Anietie Umana, Builder Tunde Lasabi, ESV. Chudi Ubosi, Eng r. Nur udeen Rafindadi, ESV. Abdullahi Sani, Engr. Samson Ivovi and Surv. Okokon Essien. Listed in the corporate category are O.T. Otis Engineering Limited and Advanced Concrete Technologies Limited. In his welcome address at the ceremony, Publisher of CED magazine, Mr. Kenneth Odusola-Stevenson, noted that many professionals in the built environment including the inductees have, in no small measures, pulled together resources, their intellectual and professional capabilities to build infrastructure across the country from road, housing, oil and gas, aviation and maritime to space technology among others. "Above all, they have all made remarkable contribution to nation building by developing and building

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HOUSING

OUTSTANDING ENGINEERS enterprises that are given opportunities and space to young professionals to engage their talent", he said. In a discussion on the theme "Engineering and Economic Prosperity of Nations", guest speaker and Chairman, O.T. Otis Engineering Limited, Otis Anyaeji, an engineer, emphasized that economic development of any nation is based on industrialization. He said for the country to industrialise, it has to start from machine tools production and move to agricultural tools such as tractors, trailers to jumpstart the economy. Anyaeji explained that there are a lot of resources in the country that needs to be harness rather than depending on importation of goods that will lead to economic prosperity of the nation and create jobs for the teeming youth that are faced with unemployment challenge. "If Nigeria harnesses what it has in the agricultural sector through engineering, it will yield more income than oil", he stressed. The O.T. Otis Engineering boss added that for engineering and other professionals to develop, the government has to be involved, "we need to try and get the government to be interested in the innovation process" he added. He disclosed that the Nigeria infrastructure master plan stipulated that about N2.9 trillion will be needed to provide and meet the infrastructural need. Chairman of the occasion, Mr. Ibikunle Ogunbayo, an engineer, said without viable construction industry, the economy of any nation is not going to develop. He added infrastructural

without viable construction industry, the economy of any nation is not going to develop. He added infrastructural provision is very important to the development of the country. 16 | www.cedmagazine.com October 2015

Guest Speaker, Engr. Otis Anyaeji

AFRICAâ&#x20AC;&#x2122;S HOUSING CHALLENGE Estimates suggest that by 2050 Africa's population will have doubled reaching 2.4 billion which will stretch the cities to beyond breaking point due to inadequate housing and associated infrastructure needs such as roads and clean water.

Engr. Alade Ajibola

Engr. Etteh

ew people disagree that Africa is entering the throes of a housing crisis as demand for decent housing far outstrips supply. This situation is as a result of a budgeoning population which has been exacerbated by a high migration of the population to urban centers. Estimates suggest that by 2050 Africa's population will have doubled reaching 2.4 billion which will stretch the cities to beyond breaking point due to inadequate housing and associated infrastructure needs such as roads and clean water. One just has to visit any major urban center in Africa to be met by roads that are chocker blocked with traffic, water rationing and the ever present power cuts. Housing deficit Take the case of Egypt with a population close to 90 million. The government is racing to establish several housing projects set to meet the current housing deficit estimated conservatively at 3.5 million. In Nigeria, Africa's most populous

country the situation is not any better with only 100,000 new houses being built annually compared to an annual demand of 700,000 and an accumulated deficit of some 17 million houses. In South Africa the government has made inroads into meeting housing needs by building over 3 million housing units on a subsidized basis since 1994 however demand is still on the higher end and current estimates of the deficit stands at about 2 million houses. In East Africa a look at Kenya suggests the picture is the same. A woefully inadequate housing stock with reports placing annual demand at 200,000 while supply is at only 50,000. The 2013 Housing Survey by the Ministry of Lands and Housing in Kenya estimated the deficit at 2 million houses over the next 10 years. These statistics paint a grim picture of an ever increasing deficit that will push more of Africa's population to slums and informal settlements especially given the current population boom. Urbanisation

In the next 2 decades UN-Habitat estimates that there will be more people living in towns than those in the rural areas. This is due in no small measure to Africa's booming economies that has resulted in an increasing middle class population with higher aspirations and appetite for modern living. An African Development Bank report places the continents middle class population at 34.3% in 2010 far higher than the figure of 26.2% in 1980. The result is a rapid rise in urbanization, consumer spending and not to be left behind - higher housing expectations. The rate of urbanisation is so high that UN-Habitat has estimated that 40,000 people move to cities in Africa every day, some would place this figure much higher. The result of the combined influences of a ballooning population, housing deficit and urbanization have created what some would call a perfect storm which if not curbed could result in a reversal of economic gains in the decades ahead because quality of life is intrinsic to economic development. Affordable housing The solution lies in providing affordable housing for Africa's population. But several socioeconomic factors are playing against the realization of this dream. For instance, the term affordable housing technology has long been associated with housing the poor and considered inferior and the African house buyer today is still irrevocably sold on traditional brick and mortar as the materials of choice for construction whose cost has continued to rise steeply year on year. In addition mortgages are either unavailable or out of reach for most of the population. Land prices on the other hand have sky rocketed as has

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ICT

ACCESSING COMPLEX PROJECTS

ENGINEERING A & A

developments. He notes that there can be hundreds of Digital construction management system offers integrated view of complex projects small and large organisations involved in a large-scale project and that, despite the best efforts and hard work of project arge construction and infrastructure team members often beyond normal projects are complex, detailed collectively forms a fully-fledged working hours, it can be exceedingly developments requiring excellent integrated project management system. difficult to ensure that the coordination The system is based upon the standard communications channels and the of such comprehensive involvement of orchestration of designers, architects, and legally required best practices of organisations and their functions is developers, engineering consultants, p r o j e c t m a n a g e m e n t , i n c l u d i n g effectively managed, often leading to contractors and subcontractors contractual obligations, hierarchy of inefficiency and delays. efficiently and effectively is difficult and disciplines and the communication Significantly, OnSite Control Systems chains of construction projects. time-consuming. says the large consulting engineering and "The main barrier to effective and The OnSiteIMS system provides a project management firms that have used single, integrated project management, efficient project management remains the OnSiteIMS system have requested communications, administration and the administration of the information the deployment of the system for their ve r i f i c a t i o n s y s t e m t h a t h e l p s once issued to site. Construction newest projects, as it effectively mitigates o r g a n i s a t i o n s t o m a n a g e t h e management methodology has not the known project management issues of t r o u b l e s o m e p a r t s o f p r o j e c t changed in the past 15 to 20 years, despite large-scale developments. management more effectively, enabling these problems being common and well "The OnSiteIMS system is currently them to focus on the development and known," explains Haefele, who is a senior deployed on 34 projects to the combined project manager with significant construction of the projects, says value of R10-billion, five of which being experience in working on large-scale development management valued at over R1-billion. systems company OnSite We are experiencing a Control Systems MD John high level of repeat business Haefele. from our clients, who have The synchronisation of realised the benefits of supplies, labour and design; the d i g i t a l i n f o r m a t i o n propagation of design or management over standard s ch e d u l e ch a n g e s f r o m paper-based methods. designers through all links to " The main benefits the subcontractors; and the reported by clients include complex administration of the i m p r o ve d t i m e role-players in these projects m a n a g e m ent and a require digital solutions. reduction in costs and "The industry requires a resources required to change to reduce complexity, control the project, because increase real-time every instruction, request, accountability and streamline a ction, document or key administration processes drawing is digitally available, to reduce nonperformance tracked and traceable. and free up limited resources Users can interact with and time that can be better each item on the system in spent on other aspects of the real-time through online project. and mobile interfaces, " OnSite Control Systems is making the daily developing the twenty-fourth communication channels module of its OnSiteIMS b e t w e e n p r i nciple system. designers, consultants and This module will allow for contractors more effective technical workshop drawings and enforceable. Real-time to be displayed and tracked for accountability is key, not construction project partners. only for construction firms Each module in the but also for consultants and, OnSiteIMS system handles importantly, investors. specific types of constructionEdited by: Martin related infor mation and Zhuwakinyu

32 | www.cedmagazineng.com October 2015

COVER FEATURE

provision is very important to the development of the country. "We are here to open a window to those who are not yet a member of the Construction Industry Hall of Fame. We are here to celebrate those members of the construction industry whose despite all odds, still perform excellently well", he added. A discussant and one of the inductee, Ambassador (Arc.) Jerry Ugokwe, noted that one of the major problems confronting the country centers on discipline and cor r uption. He emphasized that Nigerians must imbibe discipline and cut down corruption. Other special discussants including Tpl. Bunmi Ajayi, Past President of N I T P, S u r v. Jo s e p h A g b e n l a , Immediate past Surveyor General of Lagos State and all agree that with more emphasis on engineering and technology-based education Nigeria will definitely benefit from the initiative "It's important for professionals to emphasies the need to put square peg in square holes. We must be the change we want to see", he stressed. Publisher of CED, Mr. Kenneth Odusola-Stevenson, noted that if technology and knowledge form the basis for meaningful economic development, given that globalization is radically accelerating the pace of change and raising the long-term stakes, it is clear that success in knowledgebased economies depends largely on the capabilities of people who are credential in meaningful and consistent ways.

Engr. Nurudeen Rafindadi

Engr. Charles Akindayomi

Engineering, key to Nigeria's industrialisation - Expert A consulting engineer, Mr. Otis Anyaeji, has said that for the country to become industrialised, engineering innovations must be improved and acted upon by the government. Anyaeji, who spoke on 'Engineering and economic prosperity' at the third Nigerian Construction Industry Hall of Fame induction ceremony in Lagos, said engineering stipulations and innovations needed to be objectively and economically determined in

implementing both the Vision 20:2020 or its equivalent, and the National Integrated Infrastructure Master Plan. "Economic development is based on industrialisation, and the inputs for development of infrastr ucture, agriculture, environmental protection and provision of services are provided by industrialisation," he said. He added that the country also needed capabilities and skills to identify possible sources of related

technologies such as design and engineering firms, small and mediumsized enterprises, and research and development institutes, among others. Twenty-seven individuals and four corporate organisations from various fields in the built environment were inducted at the ceremony. The Publisher, CED Magazine, organisers of the hall of fame, Mr. Kenneth Odusola-Stevenson, said powerful forces, including demographics, globalisation and rapidly evolving technologies were driving

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COVER FEATURE

EVENTS

BILFINGER RESTRUCTURE

"The changing workforce and technology needs of a global knowledge economy are dramatically changing the nature of engineering practice, demanding far broader skills than simply the mastery of scientific and technological disciplines. profound changes in the role of engineering in the society. He said, "The changing workforce and technology needs of a global knowledge economy are dramatically changing the nature of engineering practice, demanding far broader skills than simply the mastery of scientific and technological disciplines. "The growing awareness of the importance of technological innovation to economic competitiveness and national security is demanding a new priority for application-driven basic engineering research and practice." According to him, success in knowledge-based economies depended largely on the capabilities of people who were skilled in meaningful and consistent ways. "Engineers are the ideal problem solvers. When you consider that economic studies conducted before the Information Technology revolution show that as much as 85 per cent of measured growth in the United States income per capita was due to technological change, a strong case can be made for seeing engineers as the key knowledge workers for capacity building and sustainable economic growth in emerging economies," Odusola-Stevenson said. He noted that by building the technical capacity of the workforce through quality engineering education programmes, the country could build a competent technical workforce, which could provide several pathways to economic development 18 | www.cedmagazineng.com October 2015

Engr. Anietie Umana

REWARDING PERFORMANCE Ghana Institute of Construction honours excellence in the country

Engr. George Okoroma

hana Institute of Construction has feted 21 individuals in the Construction Excellence Awards held in the country's capital Accra. The coveted Awards function is meant to recognize hardworking individuals who have excelled in the industry for the past 20 years. Speaking during the event, Minister for Roads and Highways in Ghana Alhaji Inusah Fuseini noted that the construction industry was playing a major role in the development agenda of Ghana adding that it was important to boost the capacity of professionals in the Industry. He also called for improved laws of respective institutions in order to control the operations of fake contractors. According Alhaji Inusah Fuseini the Ministry of Roads and Highways is working with the Ministry of Local Government and Rural Development and other key stakeholders to boost construction industry in the country.

He urged construction designers and engineers to consider the environment during their work. He explained that designs need to be done according to approved standards and competent professionals with the appropriate professional license must signoff on the designs. Such designs must also be subject to sheer review and complete scrutiny by the public. The minister said the Ministry of Roads and Highways and the Ministry of Water Resources, Works and Housing are partnering with other key stakeholders in the road sector to start training of artisans and heavy equipment operators in the construction industry in the country. He thanked the Ghana Institute of Construction for spearheading the cause of the construction industry in Ghana and highlighting the important role of the industry in the economic development of the country.

TAKING CHARGE Nawal elected as the first president of Moroccan Project Management Association (MPMA)

Engr. John Okodi-Iyah

oroccan Project Management Association (MPMA) seems to have a new beginning as the association elected its first President Ms. Nawal Gharmili-Sefrioui and event which was well attended by various stakeholders in the industry. The move is aimed at boosting project

erman-based Bilfinger has announced it will restructure the company, following a review by its executive board. T h e G e r m a n Per Utnegaard, CEO, Bilfinger contractor will look at services, industries and markets in two independent segments industrial, and building and facility. The board decided there was no link between the industrial, and building and facility sectors, and therefore agreed to operate them as two segments, as it said this would allow each greater freedom as a result. It said the freedom would help each segment become more focused on its strengths. The board also identified areas with an output of management in Morocco. The elected President Ms. Nawal Gharmili-Sefrioui explained the need of Morocco to increase its project management competences and how MPMA would contribute to face this challenge. According to Ms. Nawal projects are increasing in terms of numbers in morocco and currently the county has recorded a large infrastructure projects. She added that King Mohammed VI have speeded up the transformation process of the country' development particularly through mega projects. The President of MPMA insisted on the need to increase the visibility of the association and the number of its members thanks to this press conference. It was the occasion for the ten members of the young board to answer the many questions of the journalists from different press organizations. Ms. Nawal added that the Moroccan Project Management Association (IPMA) supported by the French member SMAP incubated the creation process of MPMA nine months ago. Today, therefore mentoring the board to elaborate the road map 2015-2017 is critical for the newly born association. www.cedmagazineng.com October 2015 | 31

WATER

INVESTMENT

BOOSTING THE ECONOMY Firm pledges US$ 27b for Mwambani Corridor in Tanzania

rookwoods Capital, a privately held equity firm will be investing US$ 27b on the construction of Tanzania's Mwambani Port and Railway Corridor (Mwaporc) project in Tanga, which is set to be one of the region's largest development corridors.

Construction of Mwambani Port and Railway Corridor (Mwaporc) is set to help in the direct shipping of goods from international ports. Mwaporc development corridor will see exporters and importers reduce the cost of logistics.

Mwaporc co-director Cuthbert Tenga confirmed the news on the free port funding and said consultations are still on-going since last year with the transport ministry, and construction will commence soon as the agreement is signed. "We have received full support from East and Central African countries and once the government of Tanzania signs the agreement, it will be used as a module by the other countries," he said. The development of the port will entail construction of a free port adjacent to the new one, a deep sea port and a standard gauge railway that will connect Tanzania, Uganda and the Democratic Republic of Congo. The Mwaporc free port will house logistics, manufacturing and service industries. The port is expected to cost a total of $32bn. Tanzania is also undertaking a major expansion of Mtwara port. Brookwood Capital is a privately held investment banking and private equity firm specializing mainly in the communications and natural resources sectors.

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AFRICA NEEDS WATER Disruptive innovation, paradigm shift to drive water-sector sustainability

hile there is increasing and broader appreciation and awareness among all stakeholder groups of the global water and sanitation challenges, the need for disruptive innovation in the water sector remains at the forefront in driving global and local water sustainability, said Water Research Commission (WRC) CEO Dhesigen Naidoo Addressing the WRC's Research D e ve l o p m e n t a n d I n n ova t i o n symposium in Johannesburg, Gauteng, last month, Naidoo emphasised water crises and water security as key risk factors, as indicated by the World Economic Forum's 'Global Risks 2015' report. However, this risk is mitigated by large investment in the water sector, resulting from two par ticular instruments on the global agenda - the declaration of the United Nations' (UN's) Sustainable Development Goals (SDGs) from 2015 to 2030, as well as the Climate Change Conference,

otherwise known as the Conference of the Parties (COP) 21. "These have become rallying points in developing the narrative to ensure that the world enjoys a more sustainable future," Naidoo said. Underlining Water and Sanitation Affairs Minister Nomvula Mokoyane's emphasis on the need to introduce disruptive innovations that would enable a step change in existing global water and sanitation strategies, Naidoo further underscored accelerated innovation and shorter pathways to impact on water research development and innovation. He added that the industry had "mountains of knowledge and can make a considerable contribution in shortening the supply chain". Stimulating the development of an inclusive and vibrant industry was another drive in changing water and sanitation strategies, Naidoo said, noting that countries that had an inclusive strategy for the disabled, the marginalised, youth and refugees in

developing the water industry, tended to have a more sustainable system. Consequently, the WRC Technology Summit, hosted in parallel with the Innovation symposium, explored this aspect in detail, with the launch of several new water-engineering and resource-management innovations, he pointed out. Naidoo also said that international partnership and responsibility had to be organised in such a way that, not only would international collaboration benefit South Africa, but the country could also accept responsibility in the world as a "contributor to solutions for Southern Africa, Africa and the world". Paradigm Shift Naidoo stressed the need for a change in thinking regarding the water engineering and infrastructure sector, where "the focus lies in reimagining the next 20 years, including . . . the new technological platform that South Africa will need to meet its universal goals". He suggested that this focus would centre on new technological innovations and opportunities, but with

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WATER

EVENTS

BILFINGER Continued

a heightened awareness on using wastewater, specifically low-energy wastewater treatment, including the accommodation of a demand-side management model. "Other focus areas would include resource management using big data, leak detection and real-time repair response-mechanisms, as short-term benefits would be gained from this type of management," Naidoo said, noting that this type of management would add 25% to the water supply of municipalities. Despite having a significantly inventive scientific fraternity, Naidoo also believed that new industry partners who are brought in to support business development and investment in the sector, could boost the enhancement of projects and innovation to a sufficient demonstration and manufacturing scale in South Africa. Sector Accolade Although Naidoo acknowledged that the challenges required a radical shift, he believed that the challenge of creating new innovation is also a significant opportunity, highlighting the achievements of the South African water-engineering sector, which, in partnership with the WRC, has contributed to water knowledge worldwide.

approximately â&#x201A;Ź1 billion which would no longer be part of the core business. Bilfinger restructured its executive board in July, prompting changes in the company's outlook. The company now focus its industrial segment on its profitable markets in central and northern Europe, with the goal of becoming the

"South Africa's work on, for example, reverse-osmosis membrane development, has catalysed the development of a vibrant membrane industry worldwide, with reverse osmosis as premier choice for water treatment," he stressed. Other achievements include South Africa's strides and implementation of dry cooling in electricity generation,

leading industrial services provider in these regions. The focus for its building and facility segment will be on realestate services. It said the new strategy was based on t h r e e o b j e c t ive s - i n c r e a s i n g p r o f i t a b i l i t y, i m p r o v i n g c a s h conversion and reducing complexity. Bilfinger appointed Per Utnegaard as its new chairman of the executive board in April. Utnegaard said, "Bilfinger is facing far-

reaching changes. We will focus our business from three to two segments, concentrate activities that are currently spread around the globe on our home market of Europe, and replace a complex structure with a transparent and fast-moving organisation. On the basis of this strategic repositioning, we will sustainably increase Bilfinger's profitability.â&#x20AC;?

and the implementation of the Water Act of 1998 for the legislative environment. "We need to galvanise on these achievements . . . to increase the contributions to disruptive innovation required to subsequently realise the sustainable development goals for South Africa," Naidoo concluded.

Leverage on the best Business and Financial News Programme on Television

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HOUSING

ENERGY

Arc. Musa Sada, Minister of Mines & Steel

ENERGY EFFICIENCY AND SAFETY Coal is a dirty fuel of the past, says WWF

he Worldwide Fund for Nature (WWF) has called on governments to introduce legislation that puts a stop to the construction of new coal plants, stating that coal consumption needed to be phased out completely by 2050, or earlier. The international nongovernmental organisation pointed out at the South African International Renewable Energy Conference (Sairec), in Cape Town, on recently, that coal consumption would have to drop substantially to be in line with the International Energy Agency's 450 Scenario. The scenario set out an energy pathway with the goal of limiting the global increase in temperature to 2 °C. As such, global coal consumption needed to peak before 2020 and be almost 35% below 2011 levels by 2035, while emissions from coal were required to be slashed by more than 40% compared with today. "The threat of long-term carbon 'lock-in' is very real," suggested a WWF policy

28 | www.cedmagazineng.com October 2015

briefing paper, stating that 1 199 new coalfired power plants, with an estimated installed capacity of more than 1 400 GW equal to 80% of the present coal power capacity - were either under construction or planned globally. The WWF, which had, along with Greenpeace, set a target for the use of 100% renewable electricity by 2050, added that governments should also not allow coal mining to take place while renewable energy needed to be fast-tracked. "There is no doubt, the train for renewables is on the move and accelerating, while the cost of buying a ticket is continuously being reduced," said the WWF's Global Climate and Energy Initiative's director of global energy policy, Stephan Singer. However, despite the rise of renewable energy, coal consumption was still high. Since 2003, coal consumption had grown globally by about 45%, much more than oil

(10%) or gas (29%), stated the report, quoting the BP Statistical Review of World Energy for 2014. The WWF policy briefing paper had outlined the threat of coal to the global climate system, saying it should be replaced by a rapid move to a 1 0 0 % r e n e wa b l e e n e r g y s u p p l y, supported by massive investments in energy efficiency. This was expected to help mitigate dangerous climate change and air pollution. "Coal has the highest carbon intensity of any fossil fuel when combusted and is, arguably, the single-biggest threat to the global climate system," said the policy paper, adding that the resulting air pollution caused by combusting coal contributed significantly to four-million premature deaths a year, mostly in the developing world. “Coal is a dirty fuel of the past," contended the WWF. Singer emphasised that coal was no longer economically viable. "Investor confidence in coal is shrinking. Coal isn't credible anymore and renewables also create three to four more jobs a [kilowatt] than coal," he told News Online on the sidelines of Sairec. Coal was also extremely costly to society, added Singer. The United Nations Environmental Programme recently estimated that outdoor air pollution, mainly from the use of fossil fuels, particularly coal, cost China about $1.4-trillion and India $0.5-trilllion in 2010. China, along with Russia, was the largest emitter of carbon dioxide.

NIGERIA’S HOUSING CHALLENGE Affordable housing: Nigeria's big challenge also a 'massive opportunity'

frica's most populous nation must spend between US$5-7bn annually in constructing new houses to close the housing affordability gap by 2025. Nigeria has a population of 174m people and struggles with a massive housing deficit exceeding 17m units. A lack of affordable housing in Nigeria should be seen not only as a challenge but also an opportunity. According to a recent report by the McKinsey Global Institute, Nigeria ranks among the top five nations globally where low-income families struggle to access affordable housing. The report titled A blueprint for addressing the global affordable housing challenge lists China, Russia, India and Brazil as the other four

wrestling with the problem. As a result, medium and low-income households in these countries are forced to live either in slums or in substandard housing. Nigeria has 11m households in such housing. Hence millions are cut off from educational and health facilities, as well as closer places of employment. From Beijing to Mumbai to Lagos, the report identifies unaffordability of housing as a growing challenge to cities. McKinsey surveyed 240 of them. Big challenge, massive opportunity In Lagos, for instance, the report states more than 90% of families are unable to afford standard units at market rates and are forced into informal housing. Lagos, the economic hub, has a population of over 11m according to official sources, although many believe

the true figure is more than 20m. "Lagos is on track to add 1.3m lowincome households, of which a majority would not be able to afford housing at market rates. Most will likely make their homes in sprawling slums with poor and unsafe living conditions," reads the report. The numbers are set to grow but it should be seen not only as a challenge but also an opportunity. McKinsey states that attempts to fill the gap should be "a massive opportunity for the private sector". Besides the construction industry, the finance sector will also benefit since billions of dollars will be required to build and redevelop current substandard units. "The largest construction opportunities in affordable housing for Continued on page 22

www.cedmagazineng.com October, 2015

OIL AND GAS REPORT

CED PROPERTY

new units to match the increase in lowincome households by 2025 would be in China, Russia, India, Brazil, and Nigeria," says the report. Cairo example As governments and developers attempt to solve the affordable housing problem, McKinsey urges cities to learn from the experiences of Egypt. The report cites how in the 1960s in an attempt to evade high land costs, low-income housing was developed 30km outside Cairo. However, due to lack of infrastructure, the 'New Cairo' project failed. Even though New Cairo offered decent housing compared with the slums, the poor could not afford to live there because it was too cut off from the city and no nearby jobs were available for its residents. New Cairo now hosts corporate offices and homes for the wealthy. McKinsey notes the affordability gap can be nar rowed by reducing construction costs through the use of industrial techniques, improving buyers' access to finance, reducing costs to developers and utilising land at the right locations 22 | www.cedmagazineng.com October 2015

adding Indonesia is most probably what will happen. "Other Opec delegates have downplayed the idea of raising the target, saying it has not been discussed yet and may not happen, or stressing that an increase to accommodate Indonesia will not raise actual production. "Even if the ceiling was raised it will be artificial, just on paper," said a

> >

second delegate. "You are adding something on paper but not in terms of world supply. It will not affect world supply." A debate on raising the ceiling could open up the controversial issue for Opec of whether to reintroduce individual output quotas. Opec ditched quotas, long a source of squabbling, when it set the output ceiling at 30-million bpd from the start

interconn ection is intended t o enhance power trade, security o f electricity supply a n d regional economic integratio n , Zambia's energy ministry said in a notice issued on Friday inviting consultants to undertake the study. The three countries plan to build 2 300 km of 400 kV power lines and 373 km of 330 kV power lines, with each country responsible for the lines in its jurisdiction. "The purpose of the study is to clarify expected power volumes and revenues," the

POWER ESSENTIALS Zambia, Tanzania, Kenya to assess power output on high-voltage power line

ambia, Tanzania and Kenya are trying to find out how much electricity a planned high-voltage power line linking them will deliver to each country as they prepare to launch the $1.4-billion project by 2018, Zambia's energy ministry said. The

of 2012. Given the changes in members' production levels since then due to events such as the collapse in Libya, growth in Iraq and sanctions on Iran, the quota issue remains sensitive and political as market share and national prestige are at stake. Some Opec members see the lack of individual quotas effectively as a license for countries able to boost production, such as Saudi Arabia or Iraq, to expand market share. "Without a quota any production ceiling is redundant, ridiculous," said a third Opec delegate. "Some countries cannot produce like before like Iran because of sanctions, or Libya. These are often opportunities for certain countries to take their share of the market." Iran called for Opec to reintroduce quotas at the last meeting held in June, although the idea failed to gain sufficient support. Opec meets to set output policy on Dec. 4.

notice said. Once completed, the project will link the Southern African Power Pool and Eastern African Power Pool thereby mitigating the power deficits that some countries may be experiencing by sharing generation resources, the notice said. "Further, the interconnector will stimulate investment in power generation arising from the large market created," it said. In July, Kenya and Tanzania invited bids for the construction of a high-voltage power line connecting the two, part of efforts to meet growing demand for electricity and deepen integration of their economies. Kenya plans additional installed capacity of 5 000 MW by 2017 from about 1 664 MW now, while neighbouring Tanzania aims to double its generation capacity to 3 000 MW by 2016. Zambia generates just over 2 200 MW of electricity and its peak demand is estimated at 1 900 MW and plans to add 1 673 MW in the next year.

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OIL AND GAS REPORT priorities, par ticularly on transformation in the petroleum sector and on fuel security. "A mutually beneficial and strategic partnership with key stakeholders is important to Chevron South Africa in delivering competitive results the right way. We recognise that the country needs a reliable and strong refining industry to ensure security of supply and be an enabler of economic transformation in the country. "I believe our transformation agenda already reflects our commitment to g over nment's imperative on socioeconomic transformation and, more specifically, the creation of black industrialists," he added. To this end, Chevron South Africa had placed over 50% of its retail network in the hands

of Caltex branded marketer entrepreneurs who, in turn, were obliged to further socioeconomic transformation. Further, the company procured a significant volume of its crude oil and petroleum products through blackempowered traders. In nonhydrocarbon procurement, it spent about R5-billion a year with local suppliers, with 100% of spend committed to broad-based blackeconomic-empowerment-compliant companies, of which 66% was with black women-owned businesses. In terms of ownership and employment equity, a consortium of b l a ck e c o n o m i c - e m p owe r m e n t shareholders and an employee trust held 25% of Chevron South Africa. Four of the seven executive director

GAS DEVELOPMENT Tanzania launches project to pipe natural gas to capital

anzania has initiated a $1.33-billion project to pipe natural gas to its commercial capital, Dar es Salaam, and help relieve chronic power shortages in the city, the president's office said in a statement on Sunday. The 532 km (330 mile) Mtwara-Dar es Salaam pipeline and gas processing plants, largely financed by a Chinese loan, is part of a plan to add about 2 000 MW of new gas-fired electricity generating power by 2018 to increase Tanzania's generating capacity to 10 000 26 | www.cedmagazineng.com October 2015

MW by 2025. Most new plants will be gas-fired but Tanzania also wants to use coal reserves and renewable resources such as wind and geothermal. "Tanzanian president Jakaya Kikwete inaugurated the pipeline and gas processing plants ... ensuring availability

NIGERIAâ&#x20AC;&#x2122;S CONSTRUCTION INDUSTRY HALL OF FAME. MEET THE LEADERS IN THE INDUSTRY....... SEPT. 25, 2015 LAGOS NIGERIA

seats at board level were also designated for black directors, of which two must be black women. Rabbipal, further noted that Chevron South Africa made a significant contribution to the country's economy. "For every employment opportunity offered by Chevron South Africa and its first-tier suppliers, three additional jobs are sustained in the country. In all, over 100 000 jobs or about 1% of total employment in South Africa can be directly or indirectly traced back to the combined force of Chevron South Africa, its suppliers and its network of Caltex service stations. "Additionally, Chevron South Africa's tax contributions amount to R19-billion a year, which is an important contribution to the country," he pointed out. of gas for electricity generation to power factories and for domestic use," the presidency said in a statement. The expanding capacity will help meet domestic demand as the government connects more people to the national grid beyond the 40% who are connected now, and offer the opportunity to export to neighbours. Tanzania estimates it has about 55trillion cubic feet (tcf) of recoverable natural gas reserves off its southern coastline. Discoveries in Tanzanian and Mozambican waters have led to predictions the region could become the world's third-largest exporter of natural gas. The government said it hopes by switching to gas-fired power plants to save around $1-billion a year in oil imports for electricity generation after the completion of the pipeline. Kikwete also confirmed a project to build a new cement plant owned by Nig erian businessman Aliko Dangote in southern Tanzania close to its natural gas fields. Kikwete said the factory would produce threemillion metric tonnes of cement a year, and cost $600-million to construct.

BEAUTIFUL BRIDE Indonesia's return to Opec complicates Dec decision on output target

STRATEGIC MOVE Chevron S Africa welcomes new chairperson

nergy company Chevron South Africa has appointed Shashi Rabbipal as its new executive chairperson. He would lead the company's corporate governance team, steer the company's continued progress on transfor mation and focus on establishing and maintaining relationships with key external stakeholder business partners. Rabbipal, who holds a BA (Law) degree and a BProc degree from universities in South Africa, joined Chevron 25 years ago. He had

accumulated extensive experience and knowledge within the industry through holding various general management roles, including as director of Chevron South Africa and a Chevron joint venture in Romania, as well as in sales and marketing for Europe, Africa, the Middle East and Pakistan. He has also worked for Chevron in the UK. Commenting on his appointment, Rabbipal said there was an opportunity for Chevron South Africa to work closely with various stakeholders towards key strategic

The Organization of the Petroleum Exporting Countries' (Opec's) policy meeting in December will welcome Indonesia's return as a member, complicating a decision by the producer group on whether to change its oil output target. After refusing to cut output last year, the Opec is pumping much more than its target of 30-million barrels per day (bpd) because of near-record Saudi Arabian and Iraqi production, and smaller increases elsewhere in the group. Indonesia's return to Opec will expand the group's members to 13 and add about 900 000 bpd to Opec output. That will push Opec production to almost 32.50-million bpd and in theory calls for the target to be increased, according to some analysts. "I would be concerned that if you change the Opec ceiling it would open the door to the whole debate about quotas," said an Opec watcher who declined to be identified. "Raising the ceiling opens up too many issues." Indonesia will be Opec's fourth-smallest producer. The Southeast Asian country pumped 910 000 bpd in August and the 12 current Opec members 31.57-million bpd, according to the International Energy Agency. Those numbers make the 30million target look even more out of date, some Opec delegates say. "It is not logical to take the 30million barrel ceiling for 13 members," said an Opec delegate, also declining to be identified. "Just

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