1. PIERRE BLAAUW Infrastructure Bottlenecks and the Civil Engineering Industry

2. Infrastructure HISTORY Pre 19001900-19301930-19601960-1982Post 1982 Post 1996 Transport: Local Roads 1859 First Railway No Flying SAR&H created Rail extended into Africa Regional Airports 1 st Powered Flight : East L. National Roads Board (1948) 1934: SAA established Develop SASOL 1 Freeway Construction Richards Bay & Saldanha Ports Pipeline Network Expanded SARCC created in 1990 ACSA established to look after 9 airports NPA established Coega Port Rail competitiveness decline Energy: Discover Gold. 1882 1 st power station Kimberley 1906 Victoria Fall Power 1923 Eskom power to non mining 1948 Eskom buy Victoria Power 1950’s Develop crude oil refineries Sasol Formed 1972: Eskom’s role as central generating authority established 1984: Koeberg Commissioned 1986: Nuclear fuel enrichment plant 1988: BEVA Nuclear fuel fabrication plant Water & San. Bucket latrines in JHB & CPT Dam building 1903 Rand Water 1904 Sewerage in JHB 1930 Vaalharts irrigation scheme 1950 Dam building stepped up Massive Dam building 1986 Lesotho Highlands Water Project 2001 Focus on phasing out bucket latrines ICT 1791: First Post Office CPT 1876: 1 st Telephone CPT 1901: Radio 1902: 1 st Public payphone in Bloem 1905: ‘Cullinan’ Diamond Posted 1924: 1 st Telegraph 1932: 1 st Airmail service 1932: 1 st Overseas Phone call Fixed line communications Limited Mainframe computers 1976 Television WWW – 1989 1990 5 millionth telephone 1994 Mobile Telephony 2003 Telkom listed

6. General Government Savings and Current Balance Source: Treasure Medium Term Policy Statement

7. Sectoral Trends

11. Reserve margin = 25% Reserve margin = 20% Reserve margin = 16% Reserve margin aspiration = 15% Reserve margin = 8-10%

13. IMPLICATIONS GROWTH BASED ON STABILITY & EXCELLENT NATIONAL TREASURY & SARB GROWTH CAUSED INCREASED DEMAND;  ROADS  WATER  ELECTRICITY  RAIL CONNECTIONS  PORTS NEXT PHASE OF GROWTH DEPENDS ON INCREASED CAPACITY OF INFRASTRUCTURE

14. MTEF Infrastructure Allocation TOTAL: R 568 billion

15. MTEF SPLIT

16. Eskom Capital Investment Total: R342 billion

17. Capacity Funnel Projects Research PBMR UCG Concentrating Solar Cogeneration Hydro Nuclear Gas Coal Solar Transmission Renewables * Red outer circle indicates – out of Borders project Opportunity Identification New Coal Supply Oscar Yanke e Discard Coal November Victor Gas 2 Zulu Mike Hwange Coal 1 Hydro 1 CBM Coal 2 Non Eskom Generation 1 Hydro 2 Whiskey 26 125 MW Pre-feasibility Tango Sierra Co-Gen 1 Foxtrot HVDC 1 Golf Nuclear n 22 650 MW 4500 3500 1600 1200 1775 1200 100 6000 500 400 500 1000 0 2000 350 1000 500 165 350 100 1150 1600 900 4500 0 10000 Feasibility, Business Case, Contract Concluding India Lima Papa Nuclear 1 Echo Quebec Delta Juliett Kilo Bravo 600 1500 2400 3000 1000 1050 2400 600 1300 4500 18 350 MW Build Renewable 1 Ingula Komati Camden Grootvlei Medupi Arnot P1&P2 Gas 1 Ankerlig 400kV 765kV 11 941 MW 100 1332 961 1520 1128 4500 300 1050 600 450 Gourikwa

18. Estimated SA Capital Spend (2007-2025) Source : PBMR; EIA; Eskom interviews; TSAPRO team analysis Estimates

19. Preliminary Estimates

20. Transnet’s gross capital investment budget Total: R61 billion

21. And Some Other Projects SANRAL R23 billion  R10 billion over the next two years Koeberg Interchange R500 million Majuba Rail Link R2-2.5 Billion R300 around R500 million King Shaka Airport R3 billion (Civils) Gautrain R1.5-R2 million a day Rand Water R7bn

22. Private Sector – Greater Risk  87 Projects announced worth R134.9 bill  Manufacturing R68.2 bill  Mining R32 bill for next 5 years  Real Estate Developments R30 bill Nedbank Project Listing

24. Civil Engineering industry

26. 2008 – TILL LATE SUSTAINABILITY SUPPLY CHAIN CONSTRAINTS  HUMAN CAPITAL  RETAIN EXISTING CAPACITY  DEVELOP ALL POTENTIAL  INVEST IN THE FUTURE  CHALLENGE EXISTING MODELS  MATERIAL ESCALATION PROCUREMENT POLITICS INDUSTRIAL ACTION COMPETITION

27. Key Risk Issues in effective infrastructure project structuring Low Risk High Risk Payment Design Development Schedule Status of Partner Low Bidding Client Management Portfolio Risk Project Development Growth & Expansion Risk vs. Reward Contract Models Qualified Resources - skills Risk Management Process Change Management Source: ECRI

28. Training and Education Current trends and requirements for technical skills to cater for growth EX Allyson Lawless

29. Civil Engineering – Engineers & Technologists EX Allyson Lawless, June 2004

33. Price Escalation : 2005 -2008

34. Source: Statistical Release P0021, Annual Financial Statistics

35. POLITICAL PARALYSIS

36. COMPETITION

37. Concluding Remarks THIS IS NOT BUSINESS AS USUAL YOU MUST DELIVER MORE INFRASTRUCTURE IN A SHORTER TIME WITH LESS RESOURCES THAN EVER BEFORE.