- Commenting on his outlook for 2024, Green affirms that consolidation and supporting the global business remain at the top of the agenda. “I do not believe the local and African market is going to turn around in the short term.”
- Green predicts that the 2024 national election will likely delay the infrastructure pipeline rollout significantly. “We are maybe two years out before we see any real significant spend on infrastructure.”
- In terms of issues around water provision and power generation, Green points to the fact that much of South Africa’s bulk infrastructure is 40 to 50 years old. “It is going to take a really steady hand, a measured approach and a lot of time and money to rectify the current situation.”
…continued from Part 1
Commenting on his outlook for 2024, Green affirms that consolidation and supporting the global business remain at the top of the agenda. “I do not believe the local and African market is going to turn around in the short term. There are a lot of challenges there. In Africa, projects are few and far between and generally not well developed or prepared.
“The selection around those projects is not necessarily always an even playing field. We would only pursue something that is primarily quality- based rather than cost-based in terms of the selection criteria. We will follow our global clients who we already have agreements with. But we are not going to just chase anything unless it is really the right client and the right project.”
In terms of South Africa specifically, Green predicts that the 2024 national election will likely delay the infrastructure pipeline rollout significantly. “It is also an issue of affordability. I am unsure that we have the funds to roll out the infrastructure we should be. We have probably got another year post-election before we see where we are headed. At the moment, we are maybe two years out before we see any real significant spend on infrastructure.”
Looking at the ongoing issues around water provision and power generation, Green points to the fact that much of South Africa’s bulk infrastructure is 40 to 50 years old. “There is no asset management plan. It becomes a reactive approach. There is no proactive maintenance and replacement. It is going to take a really steady hand, a measured approach and a lot of time and money to rectify the current situation.”
As to the role of the private sector in assisting the government to address the country’s growing infrastructure deficit, Green warns that privatisation entails both pros and cons. “We all know the private sector is going to be more efficient around delivery, but it will cost more. Citizens will baulk at additional costs, especially if government is failing to deliver essential services.
“The problem is that while government wants the assistance of the private sector, it does not want to relinquish control while not looking at fair risk transfer. Now, that does not work. You have got to do it in the right way. Just think of some of the early toll concessions, these worked because the transfer of risk was acceptable to both parties. We are not seeing that at the moment.”
Meanwhile, AECOM’s South African team continues to collaborate on a range of giga projects in the Middle East region. “Some are quite amazing. They are certainly ground-breaking,” says Green. “It is a lifetime’s chance to work on projects like this. From that perspective, it is wonderful. However, the number of changes often required, combined with fast-tracked deadlines, present major challenges.”
Green says, however, that the South African team’s performance has been exemplary in terms of finding a middle ground between client expectations and delivery. “It is also a duty of engineers and other professionals to inform the client what can be delivered realistically. Obviously, they are going to push the envelope. I strongly believe that doing proper planning upfront saves money down the line from a lifecycle perspective. It saves money on construction and during operations and maintenance. Again, it goes back to the issue of having a mature client that understands the full scope of their requirements.”
Even though 60% to 70% of AECOM’s business is still derived from key local clients, the South African team is hard at work on projects from New Zealand to Australia, Singapore, Canada, the Middle East, the US and the UK. “We are well diversified and probably a little bit more immune and futureproofed to some of the current geopolitical volatility,” says Green. “We are fortunate to be part of a global company with such extensive global work. We remain committed to our excellent local clients, both government and private.”
As for future growth areas, Green says AECOM has a particular expertise in data centres, which is standing it in good stead as that sector expands, especially in Africa with its young and rapidly growing populations. However, the sector is growing globally, with the team currently working on data centre projects around the world. Energy and renewables remain a key focus for South Africa, while AECOM’s local skillset allows it to support the Australian business in terms of resources and commodities.
“Aside from meeting the numbers, what is more important for me is that we look after our people by rewarding their hard work and ensuring career opportunities. That is building a sustainable business. I strongly believe if we look after our people, they will look after the business. Despite its global reach, a major focus of AECOM is to make an impact at grassroots level.
“We are involved with local communities wherever we deliver projects. Obviously, some of that is driven by contracts in terms of localisation of work. It is, however, something that is part of our values and which our teams strongly believe in. It is a differentiator, frankly. Also, it just makes good business sense. People join us for these reasons and our strong support of ESG goals,” concludes Green.