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       PRESS RELEASE

R420bn infrastructural spend could spiral if more project managers are not urgently trained

… analysts warn that SA’sproject management capacity is at the lowest level in our history and one of the lowest in the world at a time where it has it’s most ambitious infrastructural targets ever.

1 August 2007

Government will spend R420bn[1] over the next three years on infrastructural development – but unless South Africa can create project management skills fast, many of those projects will stall, go into overspend or be unsatisfactorily completed.

Major training company AstroTech which has a broad client base, particularly among government and public sector companies has seen rapid growth in demand for in-house project management courses. CEO Liza van Wyk, a former engineer, says that over the last year the demand for in-house courses has more than doubled, “with project management by far leading the list of in-house courses demanded. We have had to increase the number of our facilitators to meet this demand from around South Africa in government departments, big public sector corporations and the private sector.”

Every sector of the economy is poised for growth at a time where project managers have been poached by countries in the Mid-East and Europe. Eskom has R200bn-plus in projects over the next few years. Petronet is building an R11bn pipeline to pump refined oil from Durban to Gauteng. Construction is growing at an annualised 21% between the last quarter of 2006 and the first quarter of this year. Yet analysts warn that the engineer-to-project value ratio is at the lowest level in our history and one of the lowest in the world.

However, the economy needs these projects to succeed for positive growth to continue. All indicators rely on it, foreign direct investment, as an example, dropped last year, but by the first quarter of this year saw a net R3,8bn inflow in FDI, according to the Reserve Bank as foreign companies become involved in government and public sector companies infrastructure programmes. Capital investment is 19% of GDP from 15% in 2000.

A failure in good project management causes not just projects to fail, but entire sectors of the economy, take rail freight, because of a lack of investment and maintenance caused by poor management decisions and failed project management, less than 8% of SA's goods are transported by rail, down from 80% in 1980. The housing backlog (between 1,8m and 2,5m houses) – and service delivery backlogs have seen increasingly violent confrontations between local authorities, residents and police in areas as widespread as Khutsong, Warrenton, Kliptown and other areas. A Markinor survey in May found that of 23 governance and service delivery areas polled, only two - distributing welfare payments and gender equality - scored more than 75%.

Louise Rautenbach, a facilitator for AstroTech’s popular Project management for non project managers course says, “the biggest failure in projects is usually a lack of management, I recently did an in-house course for a company in Nelspruit and they had problems with processing and project management.

“I and my co-facilitator adapted the course to best meet their needs, we looked at what makes a good project manager. He or she, as an example, is someone who can build good communication, is conscious of time management, has good interpersonal skills, knows the importance of planning, resource management skills, finance and maintaining profitability.

“A small project and big project have different requirements, a small project requires 10 or fewer people, large are 10 or more people with different units. For a small project people are selected on the basis of their skill, experience and knowledge, while in a large project there are sub projects overseen by project leaders.” Rautenbach also briefs course attendees on “the different phases of a project – initiation, planning, execution and closing.”

The problems that come up in company after company, tend to be failures, Rautenbach says, in “having clearly defined rules and procedures, unclear communication and lack of quality control. People don’t allocate time to plan. People are allocated a budget and expected to sausage machine projects. A common failure is in trying to run more than one project at a time which inevitably results in inadequate attention to planning, examining risks and appropriately allocating resources, so there is often overspend, frustration and failure.”

Van Wyk says they developed the course because, “we realised that with so many construction and infrastructural projects, but too a wide variety of new growth in businesses, there were simply not enough qualified project managers. The economy doesn’t have the time to train up enough highly skilled project managers, so it is important for organisations to have more people aware of these skills and implementing them on a planned, systematic, efficient basis. There is simply too much money at stake for waste, inefficiency or failure.

“We have had excellent feedback from companies on how this course helps transform not just skills, but confidence in teams and the pace and excellence of their project work after this training. It’s amazing how much excellence can emerge after just three days of training and a relatively small financial outlay,” Van Wyk observed.

* AstroTech is a major South African training organisation based in Johannesburg. It targets executives and managers in the public and private sector for training in management, labour relations and labour law, information technology, project management and human resources. Each year close to 3 000 people take part in a range of more than 60 courses in Johannesburg, Durban and Cape Town with many more receiving specialist in-house training.

FOR FURTHER INFORMATION CONTACT:

LIZA VAN WYK, CEO AstroTech 011 453 5291 or liza@astrotech.co.za
www.AstroTech.co.za

Issued by MediaOnLine mediaonline@global.co.za

[1] Minister of Public Enterprises, Alec Erwin, as reported in Financial Mail, July 2007: “SA state-owned enterprises plan to invest R250bn over the next five years. Ramos's boss, Erwin, said recently, ‘by any account this is a massive and unprecedented programme for the public sector [and] is not the totality of public-sector investment, which over the next three years totals... R420bn.’"