Essential Business Magazine by Essential Business

AFRICA magazine

e s s e n t i a l

Nov-Dec 2014

Weatherford

ACWA ACWA Power Solarfrica Bokport CSP Power Plant

VOL 1 ED 3

Denel Aerostructures

Unveiling the South African Regional Aircraft

Intertek

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Editors Letter

ell, time is ying. This is already the third issue of Essential Business, and what a way to round off 2014.

For December, our lead feature is the hugely successful Denel Aerostructures, a company that is leading the groundbreaking South Africa Regional Aircraft (SARA) project. This month, there's a denite focus on the continent's oil and gas industry too , with several of our proles coming from members of the South African Oil and Gas Alliance (SAOGA). This group does signicant work in promoting South African rms and representing their interests both at home and abroad. To nd out more, take a look at page 5. Elsewhere, there are great interviews with companies as diverse as Container World, a leading name in South Africa's container industry, and the innovative oil and gas services rm Weatherford. At the same time, there's some great insight from multinational testing and services giant Intertek on the future plans for its African businesses, as well as proles of the fascinating ACWA Power Bokport CSP facility and the Gauteng Freeway Improvement Project. Next year is already promising to be an exciting one for Essential Business. We'll be expanding our scope considerably, both in the nature and quantity of companies that we feature. We'll have more news in January, but until then, have a great Christmas and New Year! Sam Wright Editor-in-chief

Kayen Alexander Creative Director

Production Manager

Sam Wright Editor-in-Chief

Lily Bradic Associate Editor

Project Director

Sales Director

Sales Executive

Financial Manager

Chief Operations Ofcer

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SAOGA

News Round-Up

South African Oil & Gas Alliance

Denel Aerostructures (Lead Feature) Unveiling The South African Regional Aircraft

Weatherford

ACWA

ACWA Power Solafrica Bokpoort CSP Power Plant

Intertek

SANRAL GFIP

Netcare

Container World

Guateng Freeway Improvement Project

South African Oil and Gas Alliance

perating as a partnership between the public and private sectors, the South African Oil & Gas Alliance (SAOGA) dedicates itself to promoting the upstream and midstream sectors of the oil & gas value chain in South Africa. South Africa's potential for gas energy could make signiďŹ cant changes to the region's energy mix. The resulting transformation for the economies of South Africa and Sub-Saharan Africa make exploring this potential something that SAOGA is very much behind. While current

government policy is in place to regulate and control this relatively young industry, it is vital that exploration is encouraged in order to attract the investment required to conďŹ rm South Africa's onshore and offshore oil and gas potential. Current storage and pipeline projects are experiencing potential delays due to a lack of clarity and stability on the tariff structures that would allow them to acquire the funding and investment they need. SAOGA envisions itself as the primary facilitator for the upstream and mid-stream

oil & gas industry, and aims to stimulate investment and development for the beneďŹ t of stakeholders, members, and all involved in the oil & gas industry.

resources for governments, institutions and private businesses in the area, SAOGA is able to nurture the growth and development of the region's oil & gas industry.

The organisation focuses primarily on promoting growth in four areas: marketing and business development, creating an attractive business environment, industry capability development, and investment promotion. Each of these activities plays a key part in SAOGA's mission of driving growth and promoting skills development in Sub-Saharan Africa. By maximising

The Sub-Saharan region currently accounts for 6.52% of the world's oil production and 3.19% of the world's gas production. While this is, at present, only a small percentage of the world's oil & gas production, these numbers are expected to grow signiďŹ cantly over the next few years. Spurred by the technical services that have been improving since the development of the South Coast 6

offshore infrastructure in the late 1980s, as well as local interest in the growth of the East and West African ďŹ elds, this growth is predicted to continue as the upstream exploration companies continue to develop. SAOGA's membership comprises of global operators, consulting ďŹ rms, ďŹ eld service companies, engineering and procurement organisations, and other local organisations invested in the region's industrial growth. By organising interaction

with key industry players and engaging regularly at industry events, SAOGA is working hard to grow its established presence in the region's oil & gas industry.

NEWS Round-Up This month kicked off with the news that a Chinese-funded seaport is to be constructed in Bagamoyo, Tunisia. Work on the Indian Ocean port will begin in July 2015, and deals have already been signed with China Merchant Holding International and Oman's State General Reserve Fund. While 90% of Tunisia's imports and exports are currently handled by Dar es Salaam, container trafﬁc is growing at a rate of 10% a year, making this expansion a timely and necessary one.

sustainable use of the natural resource. “Harnessing the water from the river can solve the persistent drought that the region has been experiencing. We are optimistic that the process will be successful since each of the States is very positive about the proposal," said Mandera Country governor Ali Roba.

"We will do whatever is possible to ensure the project is carried out and completed, because of its great economic beneﬁts for the entire country," said Tanzanian president Jakaya Kikwete. In other news, Kenya, Ethiopia and Somalia have come to an agreement on the construction of a new multipurpose dam and hydro power station on River Dawa in Mandera County, Kenya. The process will be undertaken by the Intergovernmental Authority on Development (IGAD) and is aimed at harnessing

Jakaya Kikwete President of Tanzania

The announcement of preferred bidders for the fourth round of South Africa's Renewable Energy Independent Power Producer Procurement Programme (REIPPP) has been postponed, it was announced last week. The delay is not entirely unexpected, and comes after ﬁnancial closing of the third round was pushed back. These delays are primarily due to grid connection problems that became apparent when attempting to connect various round-three projects to the grid. In other news, Sudan announced this week thatgold production from January through to

October was 64 tons, compared to 34 tons in 2013. The Ministry of Mining predicted last year that 70 tons would be produced before 2015. Minister for minerals, Ahmed Mohammed Sadiq al-Karu, expects the sector to lead “to the next boom in the future”.

Last week, BMG announced the new additions to its food-grade belts range: Silicone and PTFE coated process and conveyor belts and folder gluer belts. “There are many applications in the food processing sector where standard process or conveyor belts cannot be used,” said Ryan Forsyth, manager of BMG's light materials handling division. “AmmeraalBeltech's new Food Grade Peak process and conveyor belts and Rapplon FDA approved folder gluer belts for contact with dry foodstuffs, enhance BMG's portfolio of products suitable for the food industry.”

Meanwhile, Pioneer Food, the company behind Ceres fruit drinks and many other food and beverage brands, has announced plans to drop its bottling deal with PepsiCo in South Africa. The deal was ﬁrst signed in 2006, after PepsiCo cancelled their agreement with New Age Beverages. Pioneer Food will take 34 million rand write-down in order to get out of their contract.

This week, Nigeria's leading cable manufacturing company, Coleman Wires and Cables, announced plans to commit over N10 billion to Nigeria's cable market. CEO George Onafowokan claimed that the mega high voltage XLPE factory is the irst of its kind in the West Africa region. "This is a project that has cost us over N3billion, though the overall expectation is about N10billion. It is a Nigerian focus and it is in line with the local content law. As the pioneer wires and cables manufacturers, we expect to meet the requirements and capacity of customers at all times,” he said. Meanwhile, South Africa's Trade and Industry Minister Dr Rob Davies approved the new Medium and Heavy Commercial Vehicles – Automotive Investment Scheme (MHCV-AIS) guidelines earlier this week. As a sub-component of the Automotive Investment Scheme, the MHCV-AIS is designed to stimulate investment in the production of vehicles and grow the automotive sector in South Africa. "The medium and heavy commercial vehicles sector value chains are highly under-developed,” said Davies on Sunday, “and there are opportunities to deepen their value addition and potential for employment creation.”

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Denel Aerostructures At the African Aerospace and Defence Exhibition in September, Denel Aerostructures unveiled their newest project: the South African Regional Aircraft. We spoke to CEO Ismail Dockrat to find out more about this exciting endeavour.

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ituated at the heart of the Ekurhuleni Aerotropolis in the Gauteng Province, Denel Aerostructures is a recognised leader in the African aerospace industry. The company was established in 1964, and was the first on the continent to be NADCAPaccredited across multiple technology disciplines. After two years of debating what to do with its extensive design and development capabilities, Denel decided to deviate from its military theme and instead identified a national need for an efficient aircraft carrier for low-

density routes. As the economy of the continent improves, the demand for air travel has continued to grow. While some of this air travel is serviced by larger, longhaul aircraft, there is still a gap for an aircraft capable of linking the less-populated regional centres. “For smaller towns and cities with lower population density there has been a great demand for regional air travel, and for much smaller aircraft in areas where the volumes wouldn't justify a larger aircraft,” says CEO Ismail Dockrat. 14

The solution Denel proposes is the South African Regional Aircraft (SARA). The project is to be led by Denel, and has received signiﬁcant support from the South African aerospace community, including industry associations, government departments and academics. While the project is still in its pre-development stage, a prototype is expected within the next ten years. “The evidence suggests that there are lots of these kinds of locations on the continent that would have a need for such an aircraft. For example, in the South African context, it's places like Pietermaritzburg, Polokwane and Nelspruit, speciﬁcally those kind of municipalities, that we'd be looking at for this kind of aircraft,” explains Dockrat. “We believe that we have a contribution to make towards connecting communities and 15

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For smaller towns and cities with lower population density there has been a great demand for regional air travel, and for much smaller aircraft in areas where the volumes wouldn't justify a larger aircraft”

making it easier for people in urban centres to be able to travel point-to-point.” Using twenty-year-old technology, the current aircraft on the market are no longer economical or fuel-efficient. Very few of them are pressurised, meaning they are unable to fly above weather. The proposed SARA is to be pressurised, seat fifteen to twenty-four passengers in a four-abreast seating solution, and serve low-density routes.

As of yet, no considerations have been made for possible military uses. While it may seem problematic to design such a small passenger aircraft that is able to take off and land on the short airﬁelds that currently exist in smaller regional centres, Denel seem conﬁdent that they are up for the challenge. “We've done quite phenomenal things in the past,” says Dockrat, speaking of Denel Aerostructures' involvement in the military side of the aerospace industry and the success of the Rooivalk helicopter, “but we haven't done something new in the last few years. It's important for us to have an exciting visionary programme to mobilise the engineering design and artisanal skills in our industry, one that will develop excitement for young engineers in the

aerospace industry.” Stimulating the country's young aerospace engineers and technicians is a big focus for Denel, and arguably plays a signiﬁcant role in their prominence in the African aerospace ﬁeld industry. While many companies operating in South Africa have struggled with the skills shortage, Denel has its own solution. “We do a lot of things,” explains Dockrat. “We have a very strong engineering academy. We have the dedicated Denel Technical Academy, which brings aircraft technicians. I think we've shown we can make a contribution towards having the right skills.” Denel Technical Academy — an Aviation and Engineering apprenticeship training institute — is located in Gauteng, and was established over four decades ago

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to close the skills shortage within the aviation industry. “Sometimes it's a bit of a predicament. If you don't have exciting things going on, and you're lamenting the lack of skills, sometimes it's because you're not doing exciting things that you can create a passion for,” says Dockrat. “When you talk to young people about aviation, it's something that they can become passionate about, and it's something that can inspire them to want to be better at maths, better at science, and it gives young people the kind of insight that they need to pursue careers like engineering and technical engineering.”

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Using twenty-year-old technology, the current aircraft on the market are no longer economical or fuel-efficient. Very few of them are pressurised, meaning they are unable to fly above weather.

cargo holds of the giant aircraft that will be delivered to international clients over the next six years. Considering Denel's dedication to encouraging and educating young technicians and engineers, this high-activity period is unlikely to be anything but positive for the leading company in the African aerospace industry.

While SARA is expected to keep Denel Aerostructures busy for the next few years, the company will also be manufacturing ISO locks — a combination of cross-tracks and aluminium rails to be ﬁtted into the

Weatherford Thanks to its groundbreaking technology, oil services giant Weatherford has found itself at the forefront of Africa's ultra-deep drilling boom.

Back in 2007, Brazil's Petrobras uncovered vast reserves of crude oil hidden under a thick layer of salt off the country's coastline. Buried at depths of 20,000 feet, the two largest basins have now been estimated to hold 50 billion barrels of recoverable oil. These are no small numbers. These reserves are twice that of the largest offshore ďŹ eld in the Gulf of Mexico, while the salt crust can itself be up to 6,500 feet thick. At the same time, this has helped spark a wave of interest around offshore Angola, where the pre-salt plays appear to be analogous to Brazil's giant Santos and 23

Campos Basins. Given the challenges of operating in these conditions, innovative solutions are required. The consistency of the salt layer, together with the fact that it is constantly moving, means that holes often ďŹ ll in on themselves after drilling. At the same time, both temperature and pressure are hugely changeable. To solve these issues, Weatherford has looked to closed-loop drilling (CLD) technology. They add additional equipment to the rig that enables the rig's circulating system to be pressurizable, allowing

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for increased safety, much greater control of the well while drilling, and the ability to detect and deal with well-kicks instantly. CLD also enables Weatherford to deal with the “Total loss of returns” by means of their ability to switch to pressurized mudcap Drilling (PMCD) instantly.

Africa, we have three projects going in Angola as we speak”.

Speaking to Essential Business, Huub Gans, Weatherford's vice president for sales and marketing for Sub-Saharan Africa, said that now,“there's signiﬁcant interest from operators for the closed-loop drilling (CLD) variant of managed pressure drilling (MPD) in the sub-salt prospects offshore West

“We will be looking at CLD in order to avoid nuisance gas in depleted ﬁelds and to manage the pore-pressure/frac-gradient uncertainties” Huub continues, referring to the increased stability and safety by reducing mud-losses and kicks using MPD.

While this market is undoubtedly huge, the company is also looking to other areas for the technology, with onshore projects also becoming a focus.

However, despite the success of CLD in US shale plays such as the Eagle Ford, as it stands Huub says that unconventional projects, for CLD deployment in SouthAfrica, are so far not on the cards. Much of this is down to the opportunities instead of the technology. South Africa, which is thought to hold 485 trillion feet of shale gas resources, the eighth largest in the world, lifted an 18 month long moratorium on the issuing of shale licenses a year ago, but since then, no permits have been granted. Given that the country represents the continent's best bet for shale-gas production, the outlook â&#x20AC;&#x201D; in the shortterm at least â&#x20AC;&#x201D; is mixed. At the same time, there are further challenges involved. The 25

vast majority of reserves lie in the semiarid Karoo region, which is largely uninhabited. “It's initially all about the likelihood that South Africa is able to monetize the gas,” says Huub.“This requires pipeline infrastructure and LNG facilities which are super-costly. Unlike the USA too, you'll need an abundance of heavy drilling rigs because the Karoo shale gas horizon is at a great depth. The local consumption market in the Karoo is negligible due to its sparse population.” Moving forward, the company is looking to improve its workforce even further – by means of tapping into the local skill-sets in order to contribute to the sustainable development of the countries we operate in. “Building up our local talent pool is a key challenge,” says Huub. “We need to be able to bring more African talent to the table and we are continuously recruiting to

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achieve this.” At the same time, the recent drastic fall in oil prices is certain to make for a more testing environment. As the market adjusts to the new price levels – and so far, it is not yet clear what this may be – some turbulence should be expected. “The African oil industry will be affected by the current low oil prices too,” says Gans. “Some governments have based their National-budgets on prices above $80 per barrel. They will be adjusting their ﬁgures as we speak.”

ACWA Power Solafrica Bokpoort CSP Power Plant

he result of a joint venture between ACWA Power and Solafrica, the Bokpoort development won the second CSP bidding window of South Africa's Renewable Energy Independent Power Producer Programme (REIPPP). With a projected commercial operation date of 6 December 2015, work has progressed rapidly, with construction now having past the peak. As an emerging market utility company with more than 16,000MW in operation or construction, ACWA Power develops, owns and operates a range of power and water assets around the globe, with the Southern Cone of Africa being a key strategic growth market. At the forefront of this is the Bokpoort facility, which is set to be the only storable renewable energy facility with 31

utility-scale “load-following” capability, due to its 9.3 hours thermal energy storage capacity, in the region. “It's been fantastic so far. We had some issues with regards to the national metal industry strike that has caused some delays, but apart from that we've been doing reasonably well with the progress,” says Nandu D Bhula, CEO of ACWA Power Solafrica Bokpoort CSP. “I think, the biggest challenge we have had to overcome, was the ability to get local skills to the level that is expected in order to be productively employed and meet our socio-economic development objectives. We do have tough economic development obligations, and the initial hurdle was to get around that,” he continues. “But we

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successfully did, and we are doing reasonably well in terms of getting a very large proportion of our workforce from the local community, the !Kheis Municipality.” The skills shortage in South Africa has, unsurprisingly, presented some issues during the construction phases of the project. “On the one hand, you're trying to fulfil an economic development obligation and have a large proportion of the local community involved, but on the other hand, they don't necessarily have the skill sets at this stage for this type of construction and subsequent operations. It's a very rural community,” explains Bhula. “Difficulties finding the necessary skill sets nearby meant greater effort in on-the-job training and focus in upskilling through sponsoring technical training

courses at the existing local training center.” “The language barrier was also challenge. The EPC contractor and their supervision staff speak mainly Spanish, so it's difﬁcult to communicate and develop the staff that is largely Afrikaans speaking. From a health and safety supervision perspective, it has been a challenge for us,” he explains. “We've put effort into having multilingual presentations done, and bringing in local health and safety individuals who understand the local legislations and then we've shared that from a management level down to the supervision. We've had to use different types of media to spread health and safety messages,” he continues. “That includes setting up things like animated story books that have speciﬁc site safety 32

messages in it. So we've complemented our multilingual communication efforts with pictorial tutoring; and that has aided us in our efforts.” Once completed, the plant will have the largest amount of thermal energy storage in the world in its class. “We've got heat transfer fluid travelling around 180 loops of solar field with 658,000m2 of reflective surface or mirrors, with a large quantity of molten salt storage which is new for this country in terms technology. So, from that perspective, I think it is very important that we have really welltrained operators to mitigate the risks in terms of managing the operation and maintenance of the plant,” explains Bhula. “The rest of the power block is stock-standard steam power generation, and South Africa has sufficient power plants in this area for us to be able to get experienced operators and 33

maintainers. It is just the thermal energy storage and solar field heat transfer that requires us to put a little more effort into getting people trained up so that we are confident that we can manage those going forward safely.” The Project's major shareholder is ACWA Power from Saudi Arabia, and the group values are aligned towards dealing with socio-economic issues in the areas they are investing in, aimed at addressing poverty and contributing to social upliftment. “The ACWA Power model is not one where the owner comes in and builds a project and then runs away with the profits,” says Bhula. “Furthermore, projects of this nature, typically start injecting funds into communities as part of their CSI commitments after revenues start coming in but not in our case, we have started investing in our community from the onset and plan to contribute for the long-term.” ACWA Power's attention in this respect has been primarily on boosting skills — providing computers to schools, training the local communities, and giving out bursaries to start technical training in the area. Furthermore, given the rural nature of the communities, there were many families in the local areas without water or electricity, a matter of high importance that ACWA Power naturally addressed when they first focused their attention on the area. “We've done a full analysis on the socioeconomic challenges in the area. There were kids who could not study because they had no lights, and essentially their whole lifestyle were constrained as a result. So, with the donation of PV panels to a local Duineveldt community, we've brought

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I think, the biggest challenge we have had to overcome, was the ability to get local skills to the level that is expected in order to be productively employed and meet our socio-economic development objectives

light into their homes, people's lifestyles have changed, kids can study at night without needing candlelight, they are doing better in school and already have possibilities of improving their livelihoods. Aside from this, our topline water reticulation project has delivered potable water for the ﬁrst time to the homes of over 77 residence in the area. This is ACWA Power's mission through projects like Bokpoort and others to follow. It's not just about solar development, it's about a longterm commitment to the community.” Looking to the future, ACWA Power has a well-developed strategy towards building a multi-fuel, multi-technology generation portfolio of around 4,000 MW in the Southern African region. For scale, South Africa's generation target for the entire REIPPP scheme is 3,725 MW. “It is ambitious, but I don't think that it's seriously out of our reach because we have a very aggressive stance in that respect. Furthermore, if you ask me if 4,000 MW of solar energy development alone, in the Northern Cape and surrounds is ambitious, I say no. There is nothing stopping South Africa from doing so. We have a huge abundant solar resource, a hunger for renewable energy and the technology itself has high localisation potential and will only get cheaper and cheaper. This will bring

increased knowledge and competency in the industry and more importantly, jobs. We expect to spend over R1.6 billion in local content through the Bokpoort project alone,” says Bhula.

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Chris Ehlers, business director for ACWA Power Southern Africa further highlights ACWA Power's strategy going forward: “ACWA Power's focus countries are Mozambique, Botswana, Namibia and South Africa. We are fully committed as a private utility company with a very longterm approach. This includes the required capital as well”. He continues, “South Africa is seen as a hub for us to develop economically and expand our footprint. We have already committed to multiple projects in this region.”

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Intertek As a leading inspection and testing services provider, Intertek has been establishing its presence in South Africa for more than forty years. We spoke to sales and marketing manager Thomas Andrews to find out more about their operations.

ith a global network of 1,000 laboratories and ofﬁces, and over 36,000 people in more than 120 countries, Intertek is the leading quality solutions provider to a huge range of industries worldwide. The company is present in 24 African countries, and is considered the market leader within South Africa, in particular for petrochemical testing and inspection solutions.

“We're a global company with global structures in place,” explains Andrews. “What we like to highlight is that Intertek sells value quality delivered. It doesn't matter if you're in South Africa, the UK, or Australia – the level of service you get is the same.”

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Speeding up Currently, in Africa, the focus is particularly strong on development of new energy sources, from the development of liqueﬁed natural gas (LNG) to the up-and-coming industries of innovative biofuels. Intertek is assisting companies with working in these challenging environments each step of the way.

“What's important to remember is that the energy industry is based around time”, says Andrews. “Invariably we work with clients who are operating on a just-in-time model and we therefore assisting them with speed to market.” Intertek steps in to provide qualitative and quantitative assessment whenever goods change hands. These assessments take many forms, from inspecting loading and 39

discharge facilities, to carrying out environmental testing, to monitoring the quality and volume of cargo. Intertek is an ISO 9001:2008 certified company with eight laboratories and ten offices in South Africa, their flagship laboratories having received accreditation to ISO 17025. Accreditation for laboratories, in addition to being an

industry requirement, serves as a means for the company to measure its own performance, and allow them to remain experts in conformity assessment solutions and provide clients with the conﬁdence to conduct their business in a global marketplace. “You don't just have a buyer and a seller and a transaction. You have suppliers, you have transporters, you have warehousers,

you have freight forwarders, you have clearing agents. All of these are involved in the transaction,” Andrews continues. “At various points, the custody of the cargo is transferred over to them. And whenever it is transferred from one party to another, there is always a risk. So we act as the impartial third party to evaluate the form, the condition, and the integrity of the consignment. In essence, we try to assist

with reducing the risk.” This need for regulation and risk management is present in any industry in which commodities are traded. When it comes to agriculture in South Africa, biofuels are currently the source of a lot of interest, in particular the vegetable and palm oil being used as feedstock. Intertek works throughout the value chain, from early development and identifying which feedstock to use, through to production,

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What's important to remember is that the energy industry is based around time”, says Andrews. “Invariably we work with clients who are operating on a just-in-time model and we therefore assisting them with speed to market.

From developing biofuels to evaluating your environmental impact, Intertek is at the forefront assisting client with evaluating both products and systems compliance

Pressures

As a growing business globally, biofuels are used alongside tradition fuels as feedstock for a variety of processes for both heavy industries and the generation of electricity. As the world becomes more environmentally sensitive, governments are becoming increasingly aggressive with their legislations in respect to environmental issues. “From developing biofuels to evaluating your environmental impact, Intertek is at the forefront assisting client with evaluating both products and systems compliance,” explains Andrews. “One of the challenges with biofuel is that it's a new product and in some part it metamorphoses constantly. It's constantly evolving. People are learning more about what feedstock to use, and the advantages and disadvantages of each — so it's coming out, and we have to be there at the forefront. It's a constant learning exercise because new feedstocks are being used — in aviation fuel, in other types of fuels — and you see positive impacts from that, and then in other areas you see challenges,” he continues. “Again, what we have to do is stay current, look at what's happening globally and what the trends are, and try to replicate where there are success stories in respect of testing, and try and introduce those solutions here locally.” Over the next year, Intertek is looking not only to continue with its existing services, but also to improve systems to ensure their services remain at the forefront of quality solutions. Intertek's newly established

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One of the challenges with biofuel is that it's a new product and in some part it metamorphoses constantly. It's constantly evolving. People are learning more about what feedstock to use, and the advantages and disadvantages of each — so it's coming out, and we have to be there at the forefront.

laboratory in Johannesburg will allow their agricultural clients to enjoy the same professional quality experience as is currently enjoyed by the company's petrochemical and petroleum customers. This comes as part of the Intertek Group's recent pushtowards a “One Intertek” strategy, providing a much broader range of services to clients worldwide. With the scope on offer, the potential here is huge. 43

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Gauteng Freeway Improvement Project The Gauteng Freeway Improvement Project (GFIP) is the single largest road project to be undertaken by the South African government in over 20 years, and was launched by South African National Roads Agency Limited (SANRAL) in 2006 to create a better road and freeway network in Gauteng.

s the economic heart of South Africa, Gauteng has seen a boom of housing, commercial, and industrial property development over the last ten years. The resulting increase in traffic means that existing infrastructures are now over capacity, and the road and freeway networks no longer sufficient to meet Gauteng's traffic demands. This has consequences — from greater travel times, to increased fuel consumption, to higher vehicle emissions, to a lower level of profitability for developments in the province.

The Gauteng Freeway Improvement Project (GFIP) was conceived by South African National Roads Agency Limited (SANRAL) in order to provide a solution to these problems. The project is currently underway, and aims to upgrade the infrastructural network in Gauteng and implement new freeways towards an ultimate goal of a 560km network, reducing trafﬁc jams and travel times in the province. Set to inject around 29 billion rand into the South African economy, and create around 30,000 direct jobs over the

course of the project, GFIP will be contributing to widened economic and social development opportunities in Gauteng. While planning GFIP, SANRAL took several alternative transport methods into consideration, and strived to create links with the Gautrain, Metrorail and Bus Rapid Transport to provide the population with more choice in term of public transport and car-pooling. The aim of this is to alleviate congestion, reduce emissions, and improve motorists' road experience by taking a more streamlined approach to transportation. The roads and freeways affected by the project will also enjoy intelligent transport systems (ITS), including variable management signs (VMS), incident management services (IMS), and CCTV cameras. The VMS provide innovative traffic management services and allow for safer, coordinated transport networks, and have already been installed during the first phase of the project. IMS and CCTV allow SANRAL to optimise road capacity, dispatch emergency services more efficiently, and warn motorists of congestion more effectively. Traffic information is updated live on SANRAL's traffic website, giving road users access to incident alerts, construction updates, traffic speeds, and other travel information. Phase one of GFIP was planned before South Africa received confirmation that their 2010 World Cup soccer bid had been successful, and while the phase was not completed in time for the event, significant effort was made to ensure that most of the road widening and construction work was completed in time to help Gauteng cope with the additional tourism and resulting traffic. “There are about one million vehicles using Gauteng's freeways every day and we 47

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Phase one of GFIP was planned before South Africa received confirmation that their 2010 World Cup soccer bid had been successful, and while the phase was not completed in time for the event, significant effort was made to ensure that most of the road widening and construction work was completed in time to help Gauteng cope with the additional tourism and resulting traffic.

needed to ensure that traffic flowed safely and contractors were not in harm's way,” explained GFIP manager Alex Van Niekerk, speaking to Engineering News. This led to the bulk of the manual work being carried out overnight, when traffic was less dense. The phase was toll-funded, and resulted in 185km of freeway being upgraded or constructed to connect inner and outer ring roads as well as improving access to southern and western Gauteng settlements. Among the 34 interchanges that saw considerable upgrades were the Allendale, Rivonia, William Nicol, Gilloolys and Elands interchanges. Of course, there are large costs associated with such a large project. Through SANRAL, the South African Department of Transport (DoT) will be investing a total of around 55 billion rand into GFIP — 12 billion rand for the first phase, 20 billion rand for the second, and 23 billion and for the third and final phase. Despite this investment, the project still requires funding from e-tolls in order to run. The DoT believes SANRAL were thorough in their investigation of alternative funding options, and is in accordance with their conclusion that etolling was the only realistic way to

proceed. Despite this, the e-tolling mechanism used to fund the project has still been the subject of a lot of dispute. Phase two of GFIP, also to be toll-funded, is currently on hold due to this, and contracts will not be awarded until the government has reached a decision on how to proceed with the implementation of the e-tolls. There are concerns that the tolling system has caused suburbs and by-roads to be congested by road users attempting to avoid paying, as well as

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fears that businesses will pass on the additional expenses to customers, pushing up the cost of groceries and causing additional ďŹ nancial struggles for the poor. The burden this could place on other government sectors means that much discussion is required before involved parties can come to a fair compromise.

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Take advantage of an essentially committed business partner

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...essentially your business

Netcare Cares Netcare operates the largest private hospital network in South Africa.

outh Africa's healthcare system is divided along state and private lines. The private sector consumes 60% of total health spending yet caters to only about 20% of the population. Public healthcare struggles to meet the needs of the other 80% (some 42.5 million South Africans), with often overcrowded facilities, poor equipment and shortages of drugs. In 2012, Netcare, one of the country's major medical groups, entered into a ground-breaking social compact with the Department of Health and 22 other private healthcare companies, which recognised that neither the public nor private sector can individually or successfully confront the immense health challenges facing South Africa.

Health Minister Dr Aaron Motsoaledi called its formation “another important chapter in the history of our country.” “This partnership between government and the private health sector conveys a simple message that together we care about a long and healthy life for all South Africans,” he said. “It is a timely occasion that is clearly communicating the most pressing message on the minds of both policymakers and market participants that rebuilding conﬁdence in the public health sector for the full successful implementation of the NHI system is of utmost importance for our country.”

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netcare.co.za

www.netcare.co.za

Unfortunately “the pace of collaboration has been slow”, to quote Netcare's chairman Jerry Vilakazi, who says that “as the South African middle class expands, more people can self-fund healthcare,” alleviating the pressures on the public health system and helping to “release more of the public health resources required to enhance quality and access for those most in need.” CEO Richard Friedland believes Netcare has a “responsibility to advance the cause of universal access to quality healthcare” explaining that “the reality facing too many South Africans is limited access to even the most basic quality healthcare. We know that this is unacceptable and that we cannot build a successful and sustainable nation unless it is a healthy one.”

Netcare, which strives for “best-quality patient care” and treats “patients with utmost dignity and respect”, has 55 hospitals, 9,052 registered beds, 338 operating theatres and manage operating theatres and 87 retail and hospital pharmacies. Its wholly-owned subsidiary, Netcare 911, operates the largest private emergency medical service in the country with over 6.9 million insured lives and a fleet of over 180 response vehicles and ambulances, and three helicopter and two fixed-wing air ambulances. “Netcare 911 is widely acknowledged as a leader in the field of emergency medical services in South Africa,” Craig Grindell, chief operating officer of Netcare 911, said in a recent press release. The future for both - and its other divisions

that include the primary care division (Medicross)- is bright. “The demand for private healthcare within South Africa is expected to remain strong,” Netcare said, announcing its interim results, adding it “will continue work on improving occupancies, along with the focused expansion of Netcare's facilities and geographic footprint.” The group has committed to commission 379 beds in 2015 and two sizeable hospitals are currently under construction in South Africa, a 100-bed hospital in Pinehaven near Johannesburg, and a new 109-bed hospital in Polokwane. The cost of building the new hospital in Polowane is estimated at R540 million and would eventually be the ﬁrst phase of a much bigger hospital, according to Netcare's Annual Integrated Report for 2013. “Netcare continues to evaluate growth opportunities and identify areas where we can expand our national footprint. We are commencing the construction of a 109bed hospital in Polokwane, Limpopo, and a 100-bed hospital in Pinehaven, Gauteng. Both hospitals are expected to be

“

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This partnership between government and the private health sector conveys a simple message that together we care about a long and healthy life for all South Africans

commissioned in 2015. Construction work has started on the 254-bed Netcare Christiaan Barnard Memorial Hospital in Cape Town that will be relocated from its current premises to a custom-built, state-of-the- art new facility on the foreshore in 2016. We also continue to invest in maintaining and upgrading our existing infrastructure to meet increased demand and provide the best quality facilities for our patients and doctors. We monitor occupancy levels on an ongoing basis to determine where capital expenditure will have the greatest impact,” it says. Netcare, which also runs one of Britain's largest private hospital networks, was recently ranked ﬁrst in the healthcare sector and 15th overall, in the Mail & Guardian's Most Empowered Companies Awards. The group's commitment to transformation also resulted in it being the only 54

healthcare group to feature in the top 20 of South Africa's most empowered companies. The awards provide a platform for JSElisted companies – Netcare has been listed on the JSE since 1996 – to showcase their progress in delivering on black economic empowerment and transformation in South Africa. Empowerment rating and research agency, Empowerdex, analyses South Africa's top performing companies and, along with a team of ﬁnancial journalists, then determines which companies have done best in each sector and overall in terms of empowerment, transformation, ownership and enterprise development. Commenting on the group's achievement, 55

Peter Warrener, Netcare's human resources director, said organisational transformation has long been a strategic priority for the company. “The awards recognise South African companies that have embraced transformation in its totality in order to positively contribute to South Africa's business environment and to the normalisation of our society. We are encouraged that Netcare has been acknowledged in this recognised benchmarking survey,” he explained. Netcare achieved a Level 2 B-BBEE rating with an improved score of 87.82 in 2013, compared to the previous year's 82.11. The group also attained a Level 2 contributor certiﬁcation by the Department of Trade and Industry.

According to Warrener, “concerted efforts” to “accelerate transformation across all areas of their business and to redress the historic socio-economic imbalances that still prevail in South Africa” also helped Netcare land the Diversity Award at the 13th annual Oliver Empowerment Awards. “The awards highlight Netcare's continued efforts to create a truly equitable society in South Africa by implementing a transformation strategy that is aligned to the broad-based black economic empowerment (B-BBEE) framework,” he said. “Netcare's rating in The Mail & Guardian's Most Empowered Companies Award stands as testament to our group's

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commitment to redressing the deep-seated inequalities in South Africa. Netcare has made substantive progress in realising its transformation goals over the years and the company's board, management and employees will continue contributing positively towards the ultimate aim of achieving a just and equitable society in South Africa.” To learn more visit netcare.co.za.

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Container World

Container World is already the leading name in Africa's container industry. But as the oil and gas market throughout the continent continues to expand, the company is set to enjoy even more rapid growth.

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stablished in 1983,Container World has proved itself as a dependable and ﬂexible ﬁrm specializing in the sale, rental and conversions of new and pre-owned marine containers. With a turnover of more than 400 million rand, this has placed it at the forefront of a sector that remains a crucial part of the continent's shipping industry.

A key part of these offerings are containers built specifically for offshore oil rigs. Along with the standard shipping and supply ship units, Container World also offers accommodation, offices and workshops, along with boat-shaped floating skips for the lifting and transportation of non-hazardous waste to and from offshore platforms.

Unsurprisingly, this has taken the company far away from its roots in South Africa. Operating across the east and south, Pascal Vidal, the head of its oil and gasfocused offshore division, says that Container World is now “doing a lot of business on the west coast as well”. “Of course,” he continues, “we are very well known in South Africa – we have been around for 31 years now. And we have a very good reputation across Southern Africa as a whole.” The formula for this, he adds, is simple.“It's down to being active for over three decades, providing quality equipment and keeping our word. That's good enough. We're always improving our services too.”

Branching out

This has led to opportunities in some of Africa's key oil and gas producers. The ﬁrm is currently close to beginning operations through a project in Angola that Vidal describes as “more than a joint venture”. “The company has been created and is already registered,” he continues.“One of our directors has been named on the board and we will be fully operational early next year. We're just completing the administrative tasks now, such as bank accounts and ﬁnalising the investment. We're required to put money in the country but it's only a million dollars.” “The company will not be called Container World but will provide the same type of services – the sale and conversions of 61

“

It's down to being active for over three decades, providing quality equipment and keeping our word. That's good enough. We're always improving our services too.

containers, pre-fabricated containers and offshore equipment. All the support will be coming from South Africa.” This seems like a wise decision. Angola is Africa's second largest oil producer, having recently been overtaken by Nigeria. Yet the two countries have been vying for the title for some time now and while Nigeria is facing numerous challenges in the form of instability, oil theft and an uncertain environment for investors due to the longdelayed Petroleum Industry Bill, Angola's

output is rising fast. “Angola has a lot of potential, especially with the new pre-salt discoveries in the South, says Vidal.“They are on track to double production over the next ﬁve years. “We've been in the Angolan market for more than 12 years now,” he adds.“It's a neighbouring country, but it can be very difﬁcult to collect payment from customers. When we are there, our clients can pay in their local currency, the Kwanza. But with us being investors our dividends will be very easy to expatriate back to South Africa.”

“

Angola has a lot of potential, especially with the new pre-salt discoveries in the South. They are on track to double production over the next five years.”

Opportunities

Albertine basin in 2006, and the bulk of commercial production in the country is now expected to begin in 2017, once a new export pipeline and reﬁnery are built.

Moving forward, there are even more opportunities on the horizon too. “In the future, we're looking to work in Madagascar,” Vidal says.“That may start quite soon. Also, there's a major new development that will be a focus for us in Uganda. Even though it is inland, the activity on Lake Albert means that containers are still required.”

At the same time, Vidal states that the company will soon be very active in Chad – another country that it is pushing forward its nascent oil sector. This could see it double output to 260,000 bpd by 2016 – a ﬁgure that could have a signiﬁcant impact on one of the poorest nations in the world.

Huge reserves of oil were discovered in the

“We're looking to a new project in Senegal too, which will become an oil producer within three to four years,” he adds.“There's

Miguel dos Santos

Pascal Vidal

Goretti Teixeira

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Mauritania too, and all the time we'll carry on servicing our existing markets as we do.” This, he admits, will not be without its challenges. “We know that as this activity increases, so does the competition. For us we don't see it as a ﬁght, it mean us adapting our approach, knowing that there won't just be two or three companies on the market, but six or seven. Our method may be slightly different, but that won't affect product quality.”

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