A major research report unveiled by integrated infrastructure delivery company AECOM at the 2018 World Economic Forum in Davos in January has reiterated that national prosperity continues to hinge on civil infrastructure. However, one of the biggest stumbling blocks to infrastructure development, particularly in Africa, remains access to funding.
This means that the Integrated Delivery Model is the best means of realising complex, multi-disciplinary projects in Africa, argues Darrin Green, Managing Director for Civil infrastructure, Africa, at AECOM. While Design, Build, Finance and Operate (DBFO) is AECOM’s global project-delivery model, not all of these boxes can be ticked in an African context at the moment.
One of AECOM’s biggest projects is its construction supervision of the $1.5 billion Tema Port Expansion Project in Ghana.
“We cannot necessarily bring the financing, operations, or building side to bear on all projects. However, we are engaged in very deliberate partnering with select contractors and financiers. That is the way things are going, with clients increasingly looking for a ‘one-stop shop’ for infrastructure delivery.”
Further to this, Green states that the traditional model of deploying expatriates to run projects and staff country offices is no longer sustainable. “Our aim is to grow local businesses in those countries, staffed by local people,” Green highlights. “While our home base is South Africa, local knowledge and connections are extremely important in terms of market intelligence,” Green points out.
The future of infrastructure
Many of these challenges associated with infrastructure delivery have been highlighted in AECOM’s inaugural ‘The Future of Infrastructure’ report, unveiled officially at Davos in January, which canvassed expert opinion from 500 senior industry decisionmakers, all of whom are involved with global infrastructure projects valued at over USD100-million.
“As a company focused on building a better world, we are passionate about our work in advancing infrastructure that improves quality of life and prepares us to meet the challenges ahead. Increasingly, we see networks and systems around the world coming under considerable strain. At the same time, as the physical and digital worlds converge, we are also witnessing amazing innovations and new ideas just around the corner. These are testing and exciting times,” AECOM Chairman and CEO Michael S. Burke states in the foreword to the report.
While government funding remains constrained globally, it is clear that innovative funding approaches such as the Integrated Delivery Model are vitally necessary to aid the flow of private money into public projects. Green explains that the major advantage of this for African clients in particular is that it centralises risk, as well as allowing for a single point of contact and responsibility.
“While the African market is not necessarily yet mature enough for a full DBFO approach, we are aligning ourselves with AECOM globally, albeit in a slightly different way. At the moment, we have a full service offering on the design side, with our key differentiator being that we are linking up on the build and finance sides and, in some cases, on the operational side,” Green elaborates.
Tema Port expansion in Ghana
As an example of this approach, Green points to one of the biggest projects that AECOM is undertaking currently, the construction supervision of the $1.5 billion Tema Port Expansion Project in Ghana for Meridian Port Services (MPS), operator of the container terminal. Here AECOM is providing design and procurement management services prior to the award of construction contracts, following which it will supervise the actual construction.
The project commenced at the beginning of October 2016, with completion anticipated by Q4 2019. “At its peak, we will have 70 people on-site, of which 55 will be Ghanaians. The rest will comprise core skills we will need to import. While high-level management is being carried out from South Africa, we have a fully-fledged project team on the ground,” Green explains.
Itare Dam in Kenya
Another flagship project for AECOM in Africa is the Itare Dam in Kenya for the Rift Valley Water Services Board (RVWS), which will have a capacity of 100 000 m3/day. Currently still in the design phase, it also highlights AECOM’s unique approach to project financing. “A key differentiator for us here is a more integrated delivery model,” Green adds. AECOM is partnering with Italian contractor CMC, with which it has a long-standing relationship, as well as assisting with Italian export financing in order to implement the project.
Green points out that the major deficit in civil infrastructure in Africa presents significant opportunities for AECOM, which sees the bulk of its growth coming from the rest of the continent. “We have a defined focus for Africa, looking at specific countries, projects, sectors, and risk profiles. In addition, we focus on the more complex projects, where we think we can make a big difference.”
East Africa is a growth node
East Africa is a growth area, particularly Kenya and Uganda, while proximal countries like Botswana, Namibia, and Mozambique present their own opportunities. “We are seeing quite a bit of growth in West Africa, in places like the Ivory Coast, Ghana, and Senegal,” Green notes.
The biggest need is for basic infrastructure, with power generation, transmission, and distribution as a key driver for economic growth, followed by transportation and water and wastewater treatment. “These are real basics, but they are the first things needed. Secondary opportunities will flow from increasing urbanisation. Bulk infrastructure in terms of transportation, be it road, rail, or aviation, also presents major opportunities for mega projects,” Green highlights.
A key differentiator for the company is its multi-disciplinary approach to projects, predicated on a total solution offering. “We can do just about anything. We see it as one AECOM, even though there are slightly different focus points. It is part-and-parcel of our strategy to collaborate on multi-disciplinary projects, which allows us to move our people across the various end markets. It certainly makes for a seamless approach to major projects,” Green stresses.
The company’s total service offering runs the gamut from architecture to engineering, including civil, structural, mechanical, electrical, plumbing and fire, as well as cost control and project management. “I do not believe that there is another business in Africa offering all of that. It is a fully integrated service offering, which differentiates us from most of our competitors,” Green notes.
Feet on the ground
Another key differentiator is the company’s progressive approach towards Africa. “We are prepared to put feet on the ground, and are putting entities in place in focus countries; while trying to grow local business on the continent. The main design centre is still in South Africa, where the bulk of our resources are, but our model is to move out into Africa and be on the ground. That does not preclude partnering with local businesses, even in those countries where we have established entities.”
A civil engineer by qualification and profession, Green has extensive experience abroad and in Africa. One of his main goals is to make the AECOM brand a household name across the continent. “The fact that we are actively putting people on the ground means we will gain traction. It is still early days in some markets, but we are getting there.”
With significant medium-term growth unlikely in South Africa, due to a combination of political and economic uncertainty, Green reiterates that AECOM’s future growth will continue to be derived from Africa. “We have a specific strategy to focus on the larger and more complex projects, in an attempt to leverage an integrated delivery model, combined with the fact that we have access to a global skills base,” he concludes.