MARCH 2016
FOR SAFER
HIGHWAYS
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Incorporating OIL AND GAS REPORT
Engr. Dr. Isa U. Emoabino, Chairman, Nigerian Institution of Highway Engineers is forging ahead to position the practice to ensure safer Highways - led member of the body to AG-Dangote Construction
SMART CITIES A global initiative to encourage world’s cities to became “Smart” has been hailed by built environment professionals, and are united on the need for Nigeria to start focusing on buildin g smart cities www.natafamdavidconsulting.com
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4 | CED Magazine June 2014
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SMART CITIES A global initiative to encourage world’s cities to become “Smart” has been hailed by built environment professionals, and are united on the need for Nigeria to start focusing on building smart cities
30
BUILDING MATERIALS CHANGING DYNAMICS The big battle for Africa’s cement market is driving the growth of Dangote’s innovative and investment strategy while Lafarge Africa is making strategic restructuring to stay on
10
CORPORATE INTERVIEW UNECON ASSOCIATES LIMITED - GETTING THE JOB DONE, ALWAYS Engr. Ogunde, Principal/Managing Partner, Unecon Associates Limited speaks on the performance of the and contributions of the firm.
implementation of the various master plans in the country.
20
DEVELOPING STORY AVERTING DISASTER
Quess Muraina Aderemi K. FNIQS, MRICS, RQS Principal Partner
46 | www.cedmagazineng.com March 2016
Ensuring building integrity and averting building collapse, Civil Engineers caution against quack developers
CED PROPERTY www.cedmagazineng.com March 2016 | 3
DEVELOPING STORY
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EDITORIAL BOARD Kenneth Odusola-Stevenson Publisher/Managing Editor Onii Nwangwu-Stevenson Founding Editor-In-Chief
OIL PRICE MOVE Nigeria, Saudi Arabia in move to ‘stabilise’ oil market
BUSINESS DEVELOPMENT & MARKETING Kunle Odusola-Stevenson Executive Director, Business Dev., Strategy/Project Bayo Adebayo-Egbayelo Head, Special Projects
THE OIL GAME Russia has room to play in Saudi oil game with EU gas TECHNOLOGY 38 TECH’S ROLE IN FUTURE OF INFRASTRUCTURE Identifying what needs to happen to improve America’s road, bridges, water and more DEVELOPMENT REPORT 32 BUDGETING FOR FUTURE A real win for metropolitan area in 2017 transportation budget
40 ORGANISATION AND PEOPLE DEMOGRAPHICS FOR PROSPERITY Societies seeking long-term economic growth can find it by accentuating the earning power of young workers, nearretirees, and women.
4 | www.cedmagazineng.com March 2016
come quickly. It is long overdue even" Responding, the Secretary of Okpella Traditional Council, Chief Richard David dismissed the insinuations that the Traditional council does not want Dangote. He said the Council has been in the forefront of agitation for Alhaji Dangote to come and make use of the abundant limestone in Okpella to start Cement
MARKETING & BUSINESS DEVELOPMENT Festus Njiwe Oseji, Assistant Manager Marketing & Business Development
21 CED PROPERTY DEVELOPMENT A BOOST FOR THE SECTOR Infrastructure development in Nigeria boosts construction industry as the federal government focus on s spending big on infrastructure development 36 DEVELOPING STORY THE GREAT DIVERGENCE America's most successful cities, states and firms are leaving the rest behind 28 SPECIAL FOCUS OUTSTANDING QUANTITY SURVEYORS MAKING THE DIFFERENCE The duo of Dauda and Shonubi are building DWAB into a global big player
MARKETING & BUSINESS DEVELOPMENT Nelson Tuedor, SNR Marketing & Business Dev. Executive Judith Ehirim, Marketing & Business Dev. Executive Rachael Unuijiaga Marketing & Business Dev. Executive Patricia Eke Marketing & Business Dev. Executive Oluwatoyin Ayeni, Marketing & Business Dev. Executive EDITORIAL Temitayo Badewole Reporter/Researcher Afam Odusola-Stevenson Brand Development & Strategy Ruth Amadi Special Correspondent ADMINISTRATIVE/BUSINESS SUPPORT Chinonye Ikebaku, IT/ICT Executive Susan Nwosu, HR/Accounts Tammy Renee Gabriel, Special Assistant to CEO Hope Nwaodor Secretary Cynthia Eke Admin/Office Assistant PRODUCTION/STUDIO Muyiwa Idowu, SNR Camera/Photography Fatai Obanoyen, Camera Operation Gafar Sokunbo, Visual Editor Felix Ojajuni, Transportation ISSN116-074 A Century 21 Systems Comm. Ltd Publication Editorial/Advertising Office 14, Shofidiya Close, Off Ilesanmi Street, Masha, Surulere, Lagos, Nigeria Tel: 234 1 774 3404 Mobile: 234 805 5243 516 E-mail: cedmagazine@gmail.com www.cedmagazineng.com © Copyright All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any means, electronics, mechanical, photocopying, recording or otherwise without the approval of acknowledgement of the publisher.
why Dangote should not be allowed into Okpella when his coming was supposed to be a blessing to members of the community who are yearning for development of the area. The youths leaders said "we are not a cursed people, why should we say an inmvestor like Dangote should not come to Okpella. This is an international investor that even nations and heads of states are begging to come and invest in their countries. Now the same man says he wanted to come and build his cement plant here and we are hearing that some people are blocking him. "We want to put it on record that we the youths are ready and are in support of Dangote to come and invest here. It is for our own good, we want employment, we want infrastructural development. Let Okpella enter into the world map as other cities in Nigeria. No investment is ever too much and many as con come and set up businesses here, we welcome them. "Your royal majesty and elders of our community, please help us tell Dangote that he has our 100 per cent support, we will maintain peace and tranquility, the atmosphere is conducive to his business. This is a golden opportunity, we can't allow it to slip out of our hands. "Posterity will not forgive us all if Dangote should take this plant to another place, Please, tell him, the youths, the elders, the women, children and unborn ones in Okpella are calling on him to
production/ According to him, Dangote coming to Okpella is a blessing to all, "you can see the expression of joy, enthusiasm and excitement in the faces of the Chiefs when Dangote announced that he was coming to set up cement plant here. "He is welcome and we promised him he woould not be disappointed. We pledged our solidarity and cooperation to him and his business. Thre is peace here and no threat at all to him. He should come quickly." Chief David explained that when Dangote Cement begins operations, Okpella people will also occupy managerial positions, "banks will come, other businesses will open. We are for Dangote Cement, none of us is against him" Speaking in the same vein, the Okuokpellagbe of Okpella, Alhaji Dirisu said he has said it times without number that nobody in Okpella can stop Dangote from coming to set up a cement plant
"We want to put it on record that we the youths are ready and are in support of Dangote to come and invest here. It is for our own good, we want employment, we want infrastructural development. Let Okpella enter into the world map as other cities in Nigeria. No investment is ever too much and many as con come and set up businesses here, we welcome them.
here. In fact the day he announced he was ready to start construction, we were happy. It is the good of all and the community. "I don't want to be a ruler over undeveloped Community, I want a good life for my people. I want the youths to be employed, I want our women to have something doing, you cant imagine the ripple effect of Dangote Cement here in Okpella." Alhaji Dirisu assured the youths to maintain peace and that his palace will do everything possible to make Alhaji Dangote start works on his plant in Okpella, "we need him now more than ever before. Let it be on record that there is no bad blood between Okpella and Dangote. He is a friend of our people, he is my friend, he is our governor's friend. "We love him, he has nothing to fear. We want him to hasten things. Anything that can bring development is what we stand for. And Dangote cement is one of the things that can bring development and economic prosperity to our people and community", Okuokpellagbe declared." It would be recalled that Dangote Cement Plc, Group Executive Director, Devakumar Edwin had announced some production capacity expansion drives with the commencement of construction of new cement plants in two communities in the country. The new plants are expected to add 9million metric tonnes per annum to the company's current local cement output of 29.25 million metric tonnes, bringing it to a total of 38.25 million metric tonnes per annum. The company had listed the communities in which it is setting up the new plants as Okpella in the northern part of Edo State, South-South of Nigeria with a three million per annum plant and another six million per annum capacity plants in Itori in Ogun State, South-west of the country. Edwin, who made the announcement in Lagos, explained that the Okpella plant will be made up of one line and will produce a total of 3 million metric tonnes per annum, and the Itori plant which will deliver approximately 6 million tonnes per annum from two procution lines. Both plants are expected to come on stream within the next three years. www.cedmagazineng.com March 2016 | 45
In association with Strategy + Buisness
STRATEGY AND LEADERSHIP
When It Rains, It Pours
Life is procyclical. Which is another way of saying, when it rains, it pours.
C
ompanies and governments that prospered and felt remarkably confident about their prospects during the recent energy boom are now suffering and have grown remarkably pessimistic. And the changing circumstances compel them to take actions that exacerbate their challenges and cast further doubt on the future. Consider Oklahoma, the locus of the natural gas boom. Energy-related tax revenues have plummeted in the past few years, and continue to plummet this year. The state lost more than 9,000 jobs between December 2014 and December 2015. As a result, Oklahoma is staring at a deficit for the coming fiscal year of US$1.3 billion, equal to nearly 20 percent of its budget. Because states are forbidden from running deficits, Oklahoma will have to consider big spending cuts (reducing school days, firing employees) and tax increases — actions that will contribute further to the slowdown in the state. In West Texas, where many towns are experiencing the same combination of lower employment and lower tax revenues due to declining oil prices, several towns are facing potential credit downgrades — which will increase borrowing costs and aggravate the financial situation further. Companies in the oil and gas business face a similar issue. During the boom, many of them took on a lot of debt, hired many people, and made huge investments as energy prices soared. With oil and natural gas prices low, they now face a challenge. In order to raise cash to keep current on debts, they have to sell assets — at a time when prices are low. And the rush to sell into a glutted market can depress prices for assets further, which makes it harder for companies to reap the revenues they need to stay alive. It’s easy to ascribe these natural components of the boom-and-bust cycle to poor planning and a lack of foresight. But the reality is that, whether you run a company or a state, our systems are governed by a set of incentives and norms that encourage procyclical behavior and discourage countercyclical activity. 44 | www.cedmagazineng.com March 2016
Daniel Gross is executive editor of strategy+business.
What do I mean? Let’s say you run a government. Tax revenues grow rapidly because there’s a sharp rise in employment, spending, and taxes from a certain activity. The prudent, far-sighted thing to do might be to put all the gains in a rainy-day fund, which will serve as ballast at a later time. Most states do, in fact, maintain such funds. (North Dakota channels 30 percent of its oil and gas revenues into the North Dakota Legacy Fund, which functions as a kind of sovereign wealth fund for the state.) But the far more rational response — at least if your goal is to get reelected — is to share the bounty with stakeholders: to cut taxes, to improve services, to invest in infrastructure. And to a degree, this is what governments are supposed to do. The issue is that these actions effectively set up trouble down the road. Reduce tax rates, and you create a structure guaranteed to produce lower revenues when economic activity declines. Boost spending and you establish a new, higher benchmark on which all future budgets are based. So when the slowdown comes, states are always hit with a double whammy. The system is less able to generate revenues precisely at the same time that expectations and commitments are rising. Executives at companies face a similar challenge. Let’s say there’s a boom in your core business: oil production. The price of oil soars to $50 a barrel, then $60, and then
$80. The core business is providing immense rewards, and shareholders place outsized values on pure plays. The rational short-term — and expected — response is to increase the dividend, committing the company to a higher level of future payments. Next, you invest more in the highly profitable core business. After all, it’s what you know and it is where the money is. So when oil prices are high, companies get involved in larger, more difficult projects. They’re willing to pay higher prices to access resources, through leases or acquisitions. They borrow money to fund this expansions. Shareholders expect — and reward — this procyclical behavior. In retrospect, it might be shrewd to engage in countercyclical behavior — to use the gusher of profits to pay down debt, to build reserves in anticipation of a rainy day, or to invest in businesses that are less volatile. But these moves are likely to raise hackles among shareholders and the media. After all, each of them has the potential to reduce profits or cut into the returns of investors. When the economy, or a particular sector, is in expansion mode, procyclical behavior is encouraged and rewarded. The problem is that procyclicality works in reverse, as well. When the boom ends and the stock price falls, the pressure becomes intense to engage in the type of activities that stakeholders don’t like. In the past year, energy companies have been cutting dividends, slashing capital expenditures, and selling off assets at depressed prices. To a degree, these procyclical moves exacerbate the problems: reduced dividends make the stock less attractive; cutting capital expenditures can hurt a company’s future competitive position; selling off assets at fire-sale prices can force companies to record losses. When it rains, it pours. Unfortunately, there is no easy way to combat procyclicality. It’s ingrained in the way companies, markets, and governments operate. When things are going well and the climate is favorable, it’s difficult to wrap your mind around the possibility of foul weather. To plan for a bust, you’d have to change the expectations of your stakeholders and the world at large, so that everyone pays attention to long-term forecasts. Otherwise, nobody buys an umbrella when it is 80 degrees and sunny.
WHAT MAKES CITIES REALLY SMART
T
The idea of a smart city, for most of the 20th century, was science fiction. But cities can now integrate critical infrastructure such as roads, rails, subways and airports; optimise resources better; and plan preventive maintenance.
here is no one definition for the global smart cities initiative. Difference countries provide benchmarks for various services including transportation - maximum commute time should be 30 minutes in mediumsized cities and 45 minutes in metros; water availability must be 135 litres per capita per day; 95 per cent of homes should have shops, parks, primary schools and recreational areas within 400 metres, and so on. This clearly define the concept been planned by India government. The proposed cities range from Varanasi to Dholera to Amravati, covering brownfield and greenfield areas. Benchmarks would be different for both; given lack of significant Internet penetration, brownfield smart cities cannot, for instance, focus on skyscrapers or lavish promenades first. City planning has undergone several changes since Nigeria’s Independence, especially with movement of federal capital to Abuja and heavy investment in infrastructure by governments . In the 1960s, regional planning and the city master plan grew in importance, but stayed divorced from the complex realities of a poor, independent, post-colonial country. While urban poverty rose, master plans fetishised about leisurely, low-density, spread-out cities, and obsessed over removing slums. This "high modernism" resulted in plans for newer cities. The Federal Ministry of Works and Housing, which were further divided into Federal Ministry of Housing and Urban Development with Works standing alone. Urbanisation was expected to grow along those initiative and across the country. Lagos, Port Harcourt and Abuja were especially planned to represent modern Nigeria, emblems of "a new town, a symbol of Nigeria's freedom, unfettered by traditions of the past". A 'garden city' with no high-rise buildings, Abuja's wide boulevards broke the city into self-sufficient sectors, promoting liveability and exclusion. However, the structure had its failures. Abuja's urban planning was defined by an "absence of local authority, a lack of understanding of the local culture and values on the part of the planners, and the history of the region." (The Natives). In a survey of 10 cities in the Annual Survey of Nigeria's City Systems (CED Magazine 2013), Kano and Port Harcourt came close to the bottom in quality of life. Ibadan scored low in urban capacities and resources as well as in transparency, accountability and participation. Over time, national plans grew more reactive, and stuck to managing things as they were. A desire for better, cleaner, inclusive cities remained unfulfilled. We created more slums than building cities new cities. The idea of a smart city, for most of the 20th century, was science fiction. But cities can now integrate critical infrastructure such as roads, rails, subways and airports; optimise resources better; and plan preventive maintenance. Given Nigeria's finance crunch, any smart city we plan should focus first on three things: urban transportation, e-governance and land titling. Urban transportation For a sustainable city, public transport has to be the main artery. With metro systems viable only in large cities across the world and not in exixtence in Nigeria, integrated bus services will be primary. While the National Urban Transport Policy is long overdue. Even Lagos, with its extensive metro project in the work, faces significant gaps in its efforts to provide cross-sectional connectivity, with just few BRT buses. Lagos bus services continue to be hamstrung by limited or declining fleet sizes, loss-making services, inadequate resources, poor service quality and ignorance about modern vehicle technology. Cities should design bus routes to ensure multi-modal integration. A city-level Lagos Unified Metropolitan Transport System, backed by legislation, should facilitate coordinated planning and implementation of transport projects. We need an intelligent software to improve systems for vehicle location, collecting online fares, priority signalling for buses, and real-time bus information. Cities should also set up Traffic Information Management Control Centres for effective enforcement and monitoring of traffic rules. Financing this will require significant restructuring. A dedicated Urban Transport Fund, as seen in some countries in the western world, even in India, should seek to generate inflows through advertisement revenue, additional vehicle registration fees and congestion taxes to fund new projects. A special purpose vehicle (set up in collaboration with the municipal corporation, city and private players), could manage bus operations. Better e-governance The Nigerian government has experimented with various e-governance initiatives, most of which have failed to materialise, given poor cyber security and significant privacy and data protection risk. But the implementation of a secure ICT Infrastructure, comprising wireless hotspots, wi-fi networks, and fibre optic Internet delivery at home, remains fundamental. E-governance could learn from these examples. The U.K.'s "Tell us Once" service allows citizens to inform public authorities about birth, death or significant life events just once. San Francisco's DataSF.org displays public transportation arrival and departure times, recycle zones, crime patterns and more. Service requests for pothole
Continued on page 19 www.cedmagazineng.com March 2016 | 5
GOING TALLER Tallest building in Africa proposed for Durban,South Africa
T
he tallest building in Africa has been proposed for Durban city in South Africa if the ambitious proposal for a R6b project presented to the city's economic development and planning committee on Wednesday is effected. eThekwini Municipal spokesperson Tozi Mthethwa on Wednesday said that a proposal for the 88 storey building had been presented to the municipality's
Economic and Development Planning Committee by the Durban Tower Development Company. He was however quick to clarify that this is just a proposal at this stage awaiting final decision from the relevant stakeholders. "No final decision has been made regarding the development and it is still in the proposal phase," Mthethwa said. If the proposal is adopted, this
SETTING THE TIMELINE Construction of Kenya-Tanzania electricity line to begin May
skyscraper will be constructed to a tune of R6 billions and will be ready for occupation in 2021. This building will be multi-functional and will host retail, commercial, parking, hotel and residential facilities. If adopted, the building would be 370 metres above ground and would be the tallest building in Africa as well as the Southern Hemisphere a status that is currently held by Carlton centre located in Johannesburg. The building is proposed to be built on the site of the Durban Country Club and within the premises of the Natal Mounted Rifle (NMR). This is a strategic location as it will place it directly opposite Kings Park Rugby Stadium that hosts the Sharks rugby franchise and the iconic Moses Mabhida Stadium. This land belongs to the municipality but currently on lease to Durban Country Club and NMR. According to the statement, consultations with communities and other parties involved are due to start in a week's time before the proposal's tabling for approval. This master piece is the latest in a series of catalytic projects set to be rolled out by the city with the Mabhida stadium already in the precinct. Metopole Architect directors Nigel Tarbon and Tyrone Reardon presented the bold plans to the committee on behalf of the Durban Tower Development (DTDC).The councilors a have already given the go ahead to the project. Tarbon said the main aim of the project was to create another 'globally recognizable world-class icon for Durban, South Africa and Africa'.
The construction of the 510 kilometer Ke n y a - Ta n z a n i a e l e c t r i c i t y transmission line is expected to commence in May, this is according to Kenya Electricity Transmission Company Acting CEO Fernandes Barasa. "The funding for the project has already been secured and actual construction is expected to begin in May this year and completed after 24 months from the day of commencement," Barasa explained during the launch of the Energy
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ORGANISATIONS & PEOPLE
In association with Strategy + Buisness
NEWS UPDATE
similarly low rankings on the Golden Age and Young Worker indexes, but their state support for working mothers gives them higher scores for Women in Work. Policy Implications For government leaders, these findings suggest that a few key policy changes could improve labor market performance, and thus long-term prosperity. The actions below have especially high-leverage potential: Improve the quality of vocational education and technical training for young people, as exemplified by Germany, Switzerland, and Austria Remove labor market restrictions, such as those in Southern Europe and France, that make it hard for young people to get jobs Increase state support for working parents, as exemplified by the regimes in Norway, Denmark, and Sweden Shift the pension systems to encourage later retirement, as exemplified by Scandinavia, Japan, South Korea, the U.K., and the U.S. Encourage broader cultural attitudes and social norms that strongly support working mothers and gender pay equality, following the Scandinavian example Small tweaks can go a long way. For example, a gradual rise in the retirement age, some basic provision of child care, a loosening of employment restrictions, and intelligent development of apprenticeship and training programs for youth might in themselves be enough to tip the scales in an otherwise moribund economy and achieve faster growth. Of course, it is not a quick or easy matter to shift public policy in these areas. Strong political coalitions may support labor market regulations that favor insiders over outsiders (for example, many mainland E.U. countries favor their own trade union members) and that protect state pensions and other benefits for older workers. It may take a crisis to create the political will to act. For example, the Eurozone economic crisis has led to reform in some Southern European countries such as Spain, just as past economic problems led to labor market reforms in the U.K. and the U.S.
in the 1980s, Sweden in the 1990s, and Germany in the 2000s. Skills, Age, and Gender in Business The data contained in these indexes is also relevant for business leaders. If you are a senior executive in a business operating in a variety of countries, you need to be aware of how those countries’ labor market characteristics and associated legal and regulatory regimes vary. There may be tensions to manage between adopting a uniform global approach and a tailored local approach on issues like terms and conditions, training, gender pay equality, maternity leave, retirement age, company pension provision, and trade union participation in corporate governance. Second, your location decisions may be influenced by labor market characteristics. In Ger many, as compared to the United Kingdom, you may find more people with advanced technical skills — but fewer of them will be prepared to work flexible shifts for relatively low pay. These market attributes may change over time. For example, U.K. government initiatives established in 2015 are intended to move closer to the German model. They aim to create 3 million new apprenticeships for young people by 2020, funded by a new levy on larger companies. Third, you will need to adjust your policies for aging populations in most OECD economies. People over 50 will constitute a greater part of your workforce, and many may wish to retire later than did earlier generations of workers. A number of employers have already begun to shift their approach. BMW in Germany and the Vita Needle Company (an industrial manufacturer) in the U.S. have designed factories that better suit the physical capabilities of older workers. The British-based home improvement retailer B&Q makes a point of employing older workers in its stores. Their personal experience with do-it-yourself projects provides a high level of knowledge and reassurance for customers. Home Depot and CVS Caremark have similar practices. In the U.S., the National Institutes of Health (NIH) seeks out older scientists and researchers because, as a May 2014 New
York Times article on the aging workforce noted, “They often produce valuable research into their 60s and 70s.” In Japan, companies seeking out older employees include Daiwa House Industry Company, Trusco Nakayama Corporation, and Tokyu Livable Inc. To follow their example, your HR department will need to downplay retirement plans that encourage early retirement, and make more training and retraining available to older workers. You will also have to combat implicit ageism in recruitment and progression policies, especially in sectors such as technology, where older employees tend to be undervalued. Fourth, you will need to embrace gender equality more comprehensively through all aspects of your recruitment, reward, promotion, and role allocation processes. In advanced economies, on average, younger women are at least as well educated as men and often more so. But gender pay and progression gaps open up when workers are in their 30s and 40s, due to inadequate child-care and parental leave provisions, as well as to ingrained business norms. Scandinavian companies, like their governments, have led the world in this area, but progress remains slower elsewhere. Companies based in East Asia and Southern Europe are especially prone to lag behind in this regard. Finally, you may have to reach out to the public sector in unprecedented ways to get the workforce practices you need. Governments and businesses need to work together on these issues if they are make the most of the economic potential of their people. Creative policymakers in both the public and private sectors will find many opportunities to design more flexible and more inclusive new workforce practices and guidelines. The long-term economic benefits from such efforts could be huge. Author Profile: John Hawksworth is chief economist of PwC in the United Kingdom. Based in London, he edits the PwC Economic Outlook and directs the firm’s macroeconomic research program. www.cedmagazineng.com March 2016 | 43
ORGANISATIONS & PEOPLE
NEWS UPDATE
In association with Strategy + Buisness
If the UK could match Sweden’s employment rate for 55- to 69year-olds, its economic benefit would be about £100 billion per year. European countries, the gains could be even higher as a share of GDP. Another high-ranking group of countries are Ger many and its neighbors: Switzerland, Austria, and (to a lesser degree) the Netherlands. These three are particularly strong on the Young Workers index. They have longstanding traditions of high-quality technical and vocational education, often in the form of apprenticeships that combine practical and classroom training. In these countries, relatively few young people drop out of education and drift into youth unemployment; staying in school reduces the rate of crime, drug use, and other antisocial behavior. If all OECD countries could reduce the proportion of 20- to 24-year-old NEETs (“not in employment, education, or training”) to German levels, the world might gain US$1.2 trillion in gross domestic product. The U.K. alone could gain £55 billion (US$80 billion) (see Exhibit 2). The German-speaking countries, however, have lower rankings on the Women in Work index. Their child-care systems tend to be less developed than those in Scandinavia. Thus, women with young children are more likely to take relatively long breaks from the workforce. Workers in these countries also tend to retire at a younger age than workers in Scandinavia. There is significant potential to improve in these areas, just as Sweden may have something to learn from Germany on how to reduce its youth unemployment rate. Other top performers on the labor market indexes include New Zealand, particularly for older workers, and Canada, particularly for younger workers and women in general. New Zealand’s status as a remote island nation with a limited population may be a factor: This 42 | www.cedmagazineng.com March 2016
HARD TIMES AHEAD status presumably encourages more job flexibility and postponed retirements. Its younger people, lacking a full range of career opportunities, may migrate to other countries. Canada’s supportive public policy regime for working women probably contributes to its high scores. It outperforms the U.S. and the U.K., where a more market-led system leads to a labor market that is relatively flexible, but not one that functions as well for some groups, such as lower-skilled men and women with children. Cultural attitudes about women are a consistent factor in country performance. For example, the two East Asian countries in our sample, Japan and South Korea, rank among the top seven countries for older workers, but in the bottom four for women. This reflects relatively patriarchal social and cultural norms. Japanese and South Korean women traditionally leave the labor force after having children, with a strong expectation that their husbands will be the main breadwinners in the family. Although this may be changing gradually, and many women do return to work when they are older, Japan and South Korea still stand out in this regard from the other countries in our study. Eastern European countries such as Poland, Hungary, and the Slovak
Republic (as well as the Czech Republic to a lesser degree) also stand together. They score in the lower half of the rankings on all indexes, but rank especially low for older workers and women. They still follow some of the practices developed during Soviet bloc times: extended maternity leave, relatively limited provision of child care, and lower average retirement ages. Southern European countries such as Greece, Italy, and Spain (and to a lesser degree Portugal) also consistently appear near the bottom of our rankings. This may in part reflect the adverse cyclical effects of the Eurozone financial crisis since 2007, but it also reflects the cultures and practices of these countries. For example, these three nations have historically favored family care of children and featured a relative scarcity of formal child care, which reduces female participation in the labor force. Their labor market regulations make it difficult for young people to get jobs (at least in the formal economy). Generous state pension and disability benefit systems have also reduced incentives for older people in Southern Europe to work — at least until recently, when austerity measures have started to scale back these benefits. France and Belgium have
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Analysts predict hard times for construction industry in South Africa
W
hen South Africa was announced the host of 2010 World Cup, construction companies went on a celebratory mode following the construction activities that ensued. Construction firms like Murray and Roberts secured large building contacts bagging in large sums of money. For instance, the Cape Town stadium was developed by Murray & Roberts and Wilson Bayly Holmes-Ovcon (WBHO) triggering a construction frenzy. However, the construction industry in South Africa has in recent times experienced difficult times thanks to
hard economic times in the country. Construction companies in South Africa have been cutting jobs and battling depressed order books as the government reduced large-scale civil engineering and construction contracts that the big companies rely on. Late last years, the firms which
KENYA-TANZANIA ELECTRICITY
neighbours. In 2013, Kenya launched an impactful program that is anticipated to add 5,000 Megawatts to the national grid in 40 months time while Tanzania has made some discoveries of natural gas which can be used for generating electricity. The transmission line will link Kenya to the East Africa Power Pool via a 510 kilometre 400kV transmission line constructed from Suswa in Naivasha. It will further be connected to the Ethiopia-Kenya transmission system
Journalism Excellence Awards (EJEA). Funding comes from the African Development Bank which contributed US$ 50m and will cater for the construction of Kenya's portion which is constituted of nearly 96 kilometers. However, the process of selecting the contractor for the Kenyan side will be completed in a few weeks to come. Once the interconnector is complete, Kenya and Tanzania will enjoy power trade and if either country has excess power it will be able to sell some to its
South Africa's economy is struggling in the wake of power outages, a severe drought as well as the effects of plunging commodity prices.
included Murray and Roberts and WBHO announced that they were restructuring to adopt with the prevailing environment. But despite the mechanisms being put in place to cushion the the firms against the difficult economic situation, it seems the problem is getting out of hand. WBHO Chief Executive Officer Louwtjie Nel says that from where they sit the situation is bound to continue for a long period of time. "We can't see it getting better in the short term," Said Nel "We think we're going to be under pressure for another year or so, so we've just got to keep our heads down and do good projects," he added. His opinion has been echoed by analysts who reckon that the construction industry in South Africa will continue to face difficult times despite the restructuring effort. Roelof Brand, a Cape Town-based analyst at Avior Capital Markets, said that the outlook for the industry was gloomy. The expert says that the situation is expected to be tougher and tougher urging for more infrastructure investment and the starting of mining capital expenditure to salvage the the problem. South Africa's economy is struggling in the wake of power outages, a severe drought as well as the effects of plunging commodity prices. Finance Minister Pravin Gordhan last week predicted growth would be 0.9 percent this year, the slowest since a 2009 recession. through the Isinya-Suswa 400kV line, which is part of the Eastern Africa Electricity Highway. It has a transfer capacity of 2,000MW which will create a major link for power transfer between the Eastern Africa Power Pool and countries in the north such as Egypt and Sudan. The project will also go a long way in ensuring that 70 per cent of Kenyan households are connected with electricity by 2017 ahead of the target universal access by 2020. www.cedmagazineng.com March 2016| 7
PARTNERSHIP FOR GROWTH Construction of gas pipeline linking South Africa and Mozambique gains hope
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gas pipeline connecting Iran and Turkey. A similar project is being planned between South Africa and Mozambique. Plans are underway to construct a major gas pipeline linking Mozambique and South Africa dabbed African Renaissance gas pipeline. Investments will come from Mozambique and South Africa. It is estimated that constructing the pipeline will cost $6 billion. A cooperation agreement on the gas pipeline project has been signed between ENH, Profin Consulting, SacOil and China Petroleum Pipeline Bureau. The 2,600 kilometre gas pipeline from the Rovuma Basin in northern Mozambique to Gauteng province in South Africa is expected to deliver gas to towns in Mozambique along the pipeline's route. SacOil's chief executive officer, Thabo Kgogo said the agreement confirms the financing commitments required for the
pre-investment and engineering studies phases of the project, and paves the way for its speedy and effective construction and implementation. He added that the first task of the consortium is to start with a feasibility study. If the project turns out to have economic benefits it will then be taken further from a financing point of view. The chief executive expressed optimism that the construction of the pipeline will help trigger economic growth not only in the SADC region but also Africa a continent. "The project will be dealing with solving the energy crisis and if there is an oversupply of energy, industries can grow and stimulate economic growth." he said. China Petroleum Pipeline (CPP) was preferred because it built a similar pipeline in Tanzania and the fact that it has been in business for more than 40 years as well as having experience in raising funds among banks.
EYE ON THE BIG LEAGUE Egypt eyes UAE and Saudi Arabia for energy deals
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gypt has opened talks with more than three energy companies based in UAE and Saudi Arabia aiming to counter the electricity crisis that the country now faces. 8 | www.cedmagazineng.com March 2016
ORGANISATIONS & PEOPLE
In association with Strategy + Buisness
NEWS UPDATE
Currently the country has signed various project that will see it produce up to 6,750 MW, reports have shown. According to reports the electricity talks valued at $7.5 billion, are at
various stages of completion, and will finance the construction of three combined cycle power plants, Fouad Mansour, the head of the Egyptian Electricity Holding Company (EEHC) said. The Egyptian government through the Ministry of Electricity and Renewable Energy is negotiating the legal and contractual parameters with Saudi Arabia's Acwa Power to set up the Dairut power plant. This will see the country cub the shortage being witnessed since there is a rapid growth in industrial and the population also need electricity which have now turned to be basic in Africa. Meanwhile, talks are set to start with UK-based Benchmark PLC to construct a 2,300 MW combined cycle power plan in the Tobs area of Kafr Sheikh Governorate, according to the report.
In the third contract, the ministry is in talks with Acwa Power and the Abu Dhabi-based Masdar to implement a 2,200 MW combined cycle power plant in western Damietta, the report said. The contracts with Acwa Power are likely to be finalized in the coming weeks, Mansour said. Mansour added that all the projects will be funded by both the government of Egypt in partnership with the countries that they will get into agreement with. "The energy sector is where our focus is and this country needs more power therefore we will ensure that we achieve our target in the next two years" he added
practices that encourage a flexible, welltrained, and resilient workforce. Tracking the Labor Market At PwC, we have developed three relevant labor market indexes, listed below. They allow us to compare these policies and practices, and their effect on economic growth, in a wide range of countries with a relatively high level of precision. The Women in Work Index (pdf): a weighted average of five indicators covering female employment and unemployment rates, both in absolute terms and relative to men, and the gender pay gap The Golden Age Index: a weighted average of seven indicators covering the employment, relative earnings, and training rates of people age 55 to 69 The Young Workers Index: a weighted average of eight indicators covering different aspects of the labor market activity and educational participation of people age 15 to 24. The logic behind these indexes is that because labor market performance is a multidimensional phenomenon, it is better to look at a range of indicators than to just focus on, say, employment or unemployment rates. In any country, the gender pay gap — the difference between male and female earnings for equivalent professions — is a revealing indicator of the opportunities available for women. But so is the split between full-time and part-time employment rates. For younger people, participation in education and training is at least as important to long-run economic prospects as current employment rates are. For older workers, relative pay rates and participation in training, as well as the average ages at which people exit the labor force, are important factors. Our indexes combine these elements and allow comparisons both among countries and over time. They cover slightly different sets of countries depending on data availability (we have only partial results for Iceland, Estonia, Chile, Mexico, Luxembourg, Slovenia, and Turkey). But even with partial results, the comparisons are eye-opening (see Exhibit 1).
Paths to Prosperity The Scandinavian countries perform consistently well: Norway, Denmark, and Sweden are in the top five of the overall rankings, and Finland is in the top 10. These countries score particularly high on our Women in Work index, reflecting their strong publicly funded child-care programs and their relatively generous parental leave arrangements for both mothers and fathers. The indexes also show smaller gender pay gaps and high employment rates for older women. More Nordic women remain in the workforce after having children than do women of other countries. For Iceland and Estonia —
which has strong economic and cultural links with Finland — we lack the data needed for the Women in Work index, but those countries are also ranked high in the Young Workers and Golden Age indexes. Among the Nordic countries, there is only one somewhat low ranking, and that’s Sweden’s young workers score. The economic benefits of emulating Nordic performance could be huge. For example, if the United Kingdom (a middling performer on the Golden Age i n d e x ) c o u l d m a t c h S w e d e n’s employment rate for 55- to 69-year-olds, it could gain a long-term economic benefit of about £100 billion (US$145 billion) per year. That’s a GDP boost of more than 5 percent. For Southern www.cedmagazineng.com March 2016 | 41
ORGANISATIONS & PEOPLE
DEVELOPING STORY
In association with Strategy + Buisness
BANKING ON JAPAN
In 1930, in the first year of a massive global depression, Keynes predicted unparalleled economic growth by 2030. He was right.
DEMOGRAPHICS FOR PROSPERITY Societies seeking long-term economic growth can find it by accentuating the earning power of young workers, near-retirees, and women.
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n 1930, British economist John Maynard Keynes published a visionary essay called “Economic Possibilities for Our Grandchildren” (pdf). “It is common to hear people say,” he wrote, “that the epoch of enormous economic progress which characterized the 19th century is over.” This was, after all, the first year of a massive global depression. But Keynes disagreed. Instead of decline, he predicted the world would experience unparalleled economic growth. In 100 years’ time, global economic output per person could, on average, be up to eight times as great as it was in 1930. He suggested that many 40 | www.cedmagazineng.com March 2016
people would want to work less as a result, and a three-hour day or a 15-hour week could become the norm. Today, with only 14 years left before Keynes’s target date of 2030, it seems that he was broadly right about economic growth. Average income, at least in advanced economies such as the U.S. and the U.K., is already around six times as great as it was in 1930. But his crystal ball was foggier on the subject of leisure time. Indeed, work has remained central to the lives and livelihoods of most people in industrialized society, even as average incomes have risen. Despite the progress, though, two
prevailing trends have led to renewed fears about the future of economic growth. The first is the aging populations of advanced economies — in particular, those of the countries that are members of the Organisation for Economic Cooperation and Development (OECD). This trend has been linked to the grim prospect of “secular stagnation,” the theory that without a continually renewed young labor force, there won’t be enough production or consumption to support a vibrant economy, and GDP growth could level off indefinitely. The second worrying trend, at least from a labor markets perspective, is technology. Many believe that an army of increasingly intelligent robots will take most jobs away from the young, leaving a generation of unemployed and u n e m p l oy a b l e p e o p l e w i t h n o opportunities to build a broad and healthy middle class. The labor market performance data, however, tells a very different story. It suggests that broad prosperity is still possible, but that the means for achieving it are fairly specific — and not at all obvious. The clues lie in the differences among various countries in the OECD, par ticularly in the government policies and business practices related to women, education, and retirement. If the goal is to reach higher levels of prosperity, a country may find its greatest leverage in policies and
For higher levels of prosperity, a country’s greatest leverage is a flexible, well-trained, and resilient workforce.
Egypt banks on Japan and South Korea to boost its infrastructure
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THE CHINESE ARE COMING Chinese firm to construct a steel plant in Nigeria
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hinese firm Sinoma International Engineering Company and Bua Group are partnering to construct a steel plant in Nigeria and 2 cement factory in East Africa Sinoma International Engineering Company has resumed discussions with Bua Group concerning the plans to construct a steel plant in Nigeria and 2 cement factory in East Africa Bua Group Chairman, Abdulsamad Rabiu, revealed the project's total spending to cost US$1.9bn. Sinoma Company possesses the core technology and a complete innovation system in the non-metallic material industry. Last year the company signed a US$4.34bn deal with the Dangote Group to build various cement plants across Africa. According to Bua Group Chairman, each of the Bua steel plant with 1.2 million tonnes capacity will cost US$1.2bn while the other 2 cement plants with an annual capacity of 3 million tonnes will cost US$700m. He further stated that, last year the group signed a contract worth US$600m with Sinoma International to double its cement production capacity and expand its market share in Nigeria.
However, Dangote Cement has announced its plans to construct new cement plants in Nigeria, particularly in Okpella in the northern part of Edo State and Itori in Ogun State. The new plants are expected to add 9million tonnes a year to the company's current output of 29.25million tonnes a year raising it to a total 38.25million tonnes a year. The Itori plant will deliver 6milllion tonnes a year from two production lines. Both plants are expected to come on stream in the next 3 years to come. The expansion drive is targeted to expand the nationwide presence and reducing the transportation cost component of its operations. He added that the new investments will also lower the cost of production, bring about a future reduction in the price of cement and generate employment opportunities in the host communities. Dangote Cement is capable to supply to the entire western and central Africa region. The Cement company currently exports its cement to Togo, Niger and Ghana with plans to also move into the Ivory Coast.
gypt now banks on Japan and South Korea to boost its infrastructure after reports emerged that the country was eyeing a $575m soft loan from the two countries to finance its various projects. Finance ministry officials say that the country will sign three concessional loan agreements to finance projects in energy and transportation. The signing of the financial deals comes as part of Egyptian President Abdel-Fattah El-Sisi's third tour to Asia, which started on Friday. Sisi seems to have more interest in improving the country's infrastructure which is on high demand since the country's population is also on the rise. The loans will be at interest rates of less than one percent, to be repaid over a period of 50 years, including a 10-year grace period. Japan's lending package includes a $155 million loan to expand Egypt's Borg AlArab airport, located about 50km southwest of Alexandria, said an official from Egypt's International Cooperation Ministry on condition of anonymity. The package will also include $305 million to boost the capacity of three state-owned electricity distribution companies and for the construction of a 20-MW photovoltaic station in the coastal city of Hurghada on the Red Sea. "Egypt will also negotiate with Japan preliminary financial pledges of $482 million for the ongoing construction of the Grand Egyptian Museum in Giza and $335 million for power generation projects," said the source. Seoul will witness the signing of the first South Korean loan to Egypt during El-Sisi's visit, worth $115 million to finance an upgrade of the railway signaling system between the Qena and Luxor governorates in Upper Egypt. The Egyptian government has of late obtained support from Asian and Arabic countries as it is struggling to ensure that they get to develop at a steady fast speed to meet the high demand of power and more infrastructure in the country.
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CORPORATE INTERVIEW
TECHNOLOGY
HIGH RISE OFFICE BLOCK UNDER CONSTRUCTION
UNECON ASSOCIATES LIMIED
- GETTING THE JOB DONE, ALWAYS!
Engr. Ogunde, Principal/Managing Partner, Unecon Associates Limited speaks on the performance and contribution of the firm to the built industry over the years. By Nelson Tuedor and Temitayo Adetoba
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ED Magazine: Give us an overview of the company Unecon Associates Limited?
Engr. Ogunde: Unecon Associates Limited was established in 1969, and the vision of the founder was to have a company that will outlive him. He passed on about ten years ago, leaving behind his co-founding partner who also passed on about two years ago. The
vision has extended down to employees of the firm not only because of succession but also maintain the policy of high standard, integrity and merit associated with the firm. Once a Principal/Managing Partner attains the age of 65, he/she retires from active service, also, if a Partner attains the age of 60 years, he has to retire, and at 55 years as a regular staff. This organizational structure allows for new
entries into the firm to have hope of a better tomorrow. Unecon Associates, rewards merit and hard work; that is why our employees are loyal to the company. CED Magazine: How has Unecon Associates been able to maintain environmental equilibrium with the number and kinds of projects it has delivered so far?
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York, N.Y., Pittsburgh, Pa., Portland, Ore., San Diego, Calif., and Spokane, Wash. Corporate partners include Accelerated Innovations, AT&T, Autodesk, Bank of America, Black & Veatch, Cisco, Duke Energy, Esri, GE, IBM, Intel, Itron, Landis+Gyr, Microsoft, OSIsoft, Qualcomm, SAS, ThingWorx, agrade and Wells Fargo. Amy Aussieker, executive director, Envision Charlotte, says U.S. Secretary of Transportation Anthony Foxx has been a leader as Charlotte's mayor and as the U.S. Secretary of Transportation in advocating for innovative solutions to build better communities. While initiatives are making headway, construction companies and corporate owners are already making strides, implementing "smart" technologies to improve America's infrastructure. Solutions for the Future One way for cities to improve infrastructure and prevent future catastrophes is by installing monitoring technology to keep an eye on the structural behavior of bridges. As one example, The Living Bridge Project in New Hampshire, explores the future of smart and sustainable infrastructure. The project team has designed and deployed a structural and environmental monitoring system that provides information for bridge condition assessment, traffic management, and environmental stewardship. Sensors will be used to calibrate a 3D analytical structural finite
element model of the bride, and predicted structural response from this model will assess the measured structural response of the bridge as acceptable or not. The duration of the project is from 2014 until 2017 and efforts will make bridge data, history and information about new systems available to the public. As another example, the University of Michigan is doing research on a wireless sensor system for structural health monitoring, bridge safety, and damage detection, which measures electrical impedance to detect changes in the condition of the bridge, such as steel corrosion and concrete deterioration. The structural health monitoring device consists of three components including a wireless transceiver, a direct digital s y n t h e s i z e r w i t h a 3 2 - ch a n n e l multiplexed sensing interface, and a microcontroller that communicates between the transceiver and synthesizerall mounted on circuit boards and contained within a portable housing. While wirelessly monitoring bridges is one way to improve infrastructure, another is using GPR (groundpenetrating radar). In Thomaston, Conn., Infrasense, a provider of infrastr ucture nondestr uctive evaluations, completed subsurface condition investigations for two bridge decks over the Naugatuck River. The deterioration mapping was performed using vehicle-mounted GPR to scan each bridge deck without requiring land
closures. The information produced deterioration maps and helped to locate cores for compressive strength testing and chloride sampling. The results are used to plan future rehabilitation efforts. Infrasense also used GPR technology to do visual surveys of the downtown Las Vegas viaduct decks, which carry more than 1.5 miles of I-515. The data gathered was analyzed to quantify and map subsurface conditions using inhouse software and proprietar y methodologies. GPR, infrared and visual image datasets provide transportation agencies with accurate and comprehensive bridge deck condition infor mation, ultimately enabling preser vation, rehabilitation and replacement decisions. Another technique that is continuing to advance is 3D concrete paving. This is the case for Topcon dealer Ozark Laser and Shoring. Eddie Brown, machine control specialist, Ozark, is in charge of the paving business, which manages, sells, and supports stringless concrete technology. He says that no stringlines on the job enhances safety and access, provides more accessibility to the jobsite for cement trucks and equipment, and improves paving machine maneuverability. The use of 3D concrete paving has increased growth for Ozark and opened doors for other areas of business. Ozark helped install machinecontrol systems for Kansas Paving, implementing Topcon's automated suite with dozer and motor grader systems, as well as survey rovers. While these are just a few examples of how technology has advanced for road and bridge construction projects, contractors and corporate owners have an opportunity to help build the infrastructure of the future-and technology can certainly play a big role in helping streamline business processes. www.cedmagazineng.com March 2016 | 39
CORPORATE INTERVIEW
TECHNOLOGY America's infrastructure is failing. No matter which side of the political debate you land on, this is a fact on which most Americans agree. Many watched as the I35W bridge collapsed on Aug. 1, 2007 ove r t h e M i s s i s s i p p i R ive r i n Minneapolis. Today, many are listening as frequent water study updates are emerging from Flint, Mich., following the recent news of lead in the water. From failing bridges, to contaminated wa t e r, a n d b e yo n d , A m e r i c a ' s infrastructure is failing. While there are a number of considerations the government needs to make first to bring i t s i n f r a s t r u c t u r e u p t o d a t e, construction companies are landing in the middle of this-and many are finding technolog y can help build the infrastructure of the future. From sensors in bridges, to monitoring safety of failing infrastructure, to the impact of GPR (ground-penetrating radar) data, and the benefit of techniques such as 3D concrete paving, infrastructure is getting an upgrade. Now, contractors and corporate owners need to ask themselves: How are we helping build the infrastructure of the future and what role can technology play? Infrastructure Challenges There are a number of challenges associated with building the nextgeneration of infrastructure in America. Perhaps two of the biggest hurdles that exist are government regulations and considerations and technical integration challenges-both of which are being addressed today. Looking at the former, the United States' infrastructure systems today require repair and reconstruction. Adding to this, many cities are increasingly becoming overcrowded and congested. Many in government recognize that our infrastructure needs to be fixed; however, few have a solution for how to get there. The American Society of Civil Engineers' Report Card gives America's infrastructure a D+ grade and estimates $3.6 trillion is needed by 2020 to bring it up to acceptable levels. Areas in particular that are poor include energy, roads, wastewater, levees, drinking water, schools, transit, waterways, aviation, 38 | www.cedmagazineng.com March 2016
hazardous waste and dams. The organization has three key solutions to improve the grade: increase leadership in infrastr ucture renewal, promote sustainability and resilience, and develop and fund plans to maintain and enhance America's infrastructure. In addition, the nation needs government, tech companies, and construction to come together to develop innovative solutions to address the infrastructure challenges faced today. To help, the Association of Equipment Manufacturers announced the Infrastructure Vision 2050 Challenge-a three-phased, crowd-sourced competition to award prizes for innovative ideas to improve crumbling infrastructure. The challenge leverages HeroX crowdsourcing model designed to bring business, technological, and social innovation to local and global communities. The first two phasescomplain to engage the public and dream to solicit new thinking and solutionslaunched earlier this year. The final phase-build to implement solutions on a
larger scale-will launch in summer 2016. Initiatives such as this will help improve America's infrastructure. With advancing technology such as drones, automated cars, and other tools to effectively measure and manage how infrastructure is performing, the opportunities for improving America's infrastructure are endless. On the technology side of the equation, however, one of the biggest challenges is bringing all of the players together to deliver solutions to build technology of the future. This is where initiatives such as Envision America come into play. Evolving out of Envision Charlotte, which began in 2011, with a goal of reducing energy use by 20% within the center city in five years, Envision America brings municipal leaders, tech companies, and academia together to help create smart-city solutions for the future. Today, 10 cities are involved in the program including Cambridge, Mass., Dallas, Texas, Greenville, S.C., Los Angeles, Calif., Milwaukee, Wis., New
TECH’S ROLE IN FUTURE OF INFRASTRUCTURE Identifying what needs to happen to improve America's roads, bridges, water and more.
E n g r. Ogunde: We have k e p t o u r releva nce i n the
We have been very focused over the years, having vertical growth in all areas and one major thing that has helped to stabilize our growth over the years is the consistent training of our staff. One of our core values is capacity building, as we are into M&E consultancy, infrastructure, the oil & gas industry consulting and project management consulting - Engr. Babatunde Ogunde
ind ustry over the years because we have operated with maximum integrity, focus and consciousness of our brand. We operate with the understanding that we have a name to protect. Also because we know the importance of customer satisfaction in business, we do not renege in our efforts to deliver right on time and the best quality. We are not perfect, but as soon as any error occurs, we address immediately and make sure it does not repeat itself.
infrastructure, the oil & gas industry consulting and project management consulting. Due to our organizational structure, we have been able to maintain employees' stability over the years; that has helped to maintain healthy relationship with our clients. All these, we will continue doing, and better than we have always done. CED Magazine: Following the quest for diversification of the Nigerian economy, do you think that having
CED Magazine: How do you intend to improve your firm's performance within the industry in 2016? Government policies generally are Engr. Ogunde: First of all, we always supposed to add value to living but try to outshine our project delivery targets every year. Every quarter, we the major challenge has always usually have a break to do checks and been their inconsistency. balances. We have been very focused over the years; h av i n g ve r t i c a l growth in all areas and one major thing that has helped to stabilize our growth over the years is the consistent training of our staff. One of our core values is capacity building, as we are into M&E c o n s u l t a n c y , Factory Under Construction
more power plants, oil rigs, factories and refineries can have the potential for total industrialization in Nigeria? Engr. Ogunde: Of course, it will definitely help. With more refineries, there will be increased labour which will also enhance standard of living. In my opinion, one major way to make sure refineries are adequate in the country is to ensure that there are refineries in every state. Crude oil will be pumped to each of these refineries and they will be licensed to refine. This way, the states are being empowered to embark on infrastructural development projects and gradually, the nation will begin to develop. Understanding that refineries are not so easy to build, my opinion is to begin the plan to start building them now. We need to start taking advantage of the population we have; we can produce most of the products we use at home instead of importing them. We have all it takes to make life comfortable for our citizens. One edge Britain's economy has over ours is the ability to subsidize indigenous products and services. If people are not hungry, they will work;
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DEVELOPING STORY
CORPORATE INTERVIEW
it is just a matter of leadership and direction. As consultants, we are being The government should simply presented with challenges created encourage indigenous manufacturing, and by the desires of mankind to live according industrialization will surely to their taste of life, improved lifestyle, and boost our economy. For instance, if each state maximize technological changes around them generates power, they can and in them, and are expected to come up either choose to sell or give with practical solutions. So it is quite challenging, free as long as they are paying for it. About four interesting and aids self development. states in the north are already Engr. Tunde Ogunde generating their own power, so it is very achievable. This way, the whole nation will not be dependent on only Kainji Dam for electricity, same goes governm ent of for all the various sectors. Indigenous change; but it is not all of us manufacturing should be encouraged in that can withstand the concept of this all of them and in a matter of time; we change. It is the middle class that can will see drastic positive changes in our economy. CED Magazine: As a professional, what drove your interest into the energy and construction sectors respectively? Engr. Ogunde: Right from my younger days, I told myself I need to explore in my profession, so I wouldn't work in the maintenance field. I needed exposure, so I chose research and development which ultimately translates to consultancy. Consultancy helps you to be creative in the face of a n y t e c h n i c a l c h a l l e n g e s. A s consultants, we are being presented with challenges created by the desires of mankind to live according to their taste of life, improved lifestyle, and maximize technological changes around them and in them, and are expected to come up with practical solutions. So it is quite challenging, interesting and aids self development.
Government needs to get every stakeholder, operator and consumer involved in the built environment in the drawing up of these policies.
Educational Project
CED Magazine: Have you been comfortable with government policies that affect the built environment in times past? Engr. Ogunde: Government policies generally are supposed to add value to living but the major challenge has always been their inconsistency. We are in the era of a new government now, and it is a
help the government drives the policy of change, but in a situation where majority in this class do not believe in it because of short sightedness, it becomes very difficult to achieve. This is where we are in Nigeria of today. Even the anti-corruption fight is facing major challenges as constitutionally, there seems to be no outright punishment for corrupt practices and the National Assembly has not been cooperative enough with the Executive Arm of Government. In this country, we don't have shortage of policies; implementation has always been the issue. The government needs to get every stakeholder, operator and consumer involved in the built environment in the drawing up of these policies. They should not just thrust them upon us like that. CED Magazine: Would you agree with some professionals that the downstream sector of the oil and gas industry is maximally developed and that the government should focus more on other sectors? Engr. Ogunde: If that is true, Nigerians will be benefiting from the oil and gas sector, but the reverse is the case, as it is widely known that the major beneficiaries or the IOCs, and the truth is they are exploiting us. Even though the Local Content Act is now active, we are just struggling to thrive. I learnt that Philippines have been employed to start doing the welding activities needed for our refineries. At a point in the past regime, militants were taking abroad and trained for the job, this should be continued in my own opinion. Capacity building is the strength of any developed nation, and this is what we do at Unecon Associates and we will continue to encourage our government to embrace it as it is a capital project that has unquantifiable returns for our economy in the future.
"campus" featuring bars, restaurants and the kind of tech firms where staff ride around on scooters. The city's performing-arts centre, across the road, is one of the four best-attended theatres in the country. Mr Bell says public-private partnerships account for much of the investment. Durham is unusual for its failure to drag up state-wide incomes. The state's labour-force participation rate, at 61%, is grim even by American s t a n d a r d s. E l s e w h e r e , t h e presence-or absence-of rich cities determines economic fortunes. States with one of today's richest 50 cities have grown 13% in perperson terms since 2001. The 18 (mostly southern and southwestern) states without such a city saw growth of just 7%. As a result, inequality between states has risen for most of the past decade-and-ahalf (see chart). Rich cities typically attract s uccessf ul , g rowi n g f i r m s. Nuvotronics is young, employing fewer than 100 people, and did not
move to Durham until 2013. But the city also plays host to well-established firms like Cree, which makes LED lighting, and giants like Quintiles, a consultancy which works on pharmaceutical trials. Attracting the right companies matters because America's firms, too, are diverging. In the past two decades returns to investment at the most profitable 10% have more than doubled
by one measure. Returns for middling performers have increased only a little (see chart). A recent paper by Jason Furman of the White House and Peter Orszag, a former budget chief, says this could be because the best firms are gaining market power (think of Apple's dominance of the smartphone market). A report by McKinsey attributes the divergence to the varying pace of digitisation across industries. Highly digitised industries such as technology, media and professional services-all common in successful cities-have benefited from the juiciest increases in margins. Digital laggards, such as health care and offline retailing, are doing less well. This bears directly on the inequality which matters most: that in wages. Two recent studies suggest that most of the increase in inequality over the past four decades is explained by wage gaps between firms rather than within them. A secretary will probably earn more working for Goldman Sachs than working for the local plumber; it is more lucrative to be a programmer at Facebook than in a corporate backoffice. This means that bringing highly skilled workers to an area is not enough to guarantee high wages; the right firms must come to town, too. The end of mediocrity In 2013 Tyler Cowen, an economist at George Mason University, predicted in his book "Average is Over" that the fortunes of both people and places would become more polarised. Ambitious and talented workers, he argued, would want to work in a relatively small number of cities and regions. These vibrant clusters would then benefit from increasing returns to scale, cementing their advantages. Mr Cowen's predictions are already coming true. While successful cities grow, almost 60% of rural counties are losing population. With America's shale and manufacturing industries suffering, the pull of successful cities is becoming greater still.
ESTATE DEVELOPMENT
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HABITAT 111 ENERGY
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THE GREAT DIVERGENCE America's most successful cities, states and firms are leaving the rest behind
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N THE Nuvotronics factory in Durham, North Carolina, small is beautiful. The firm, founded in 2008, uses a process resembling 3D printing to make miniaturised radio chips for jets and satellites. Typically, such chips are the size of a chocolate bar; Nuvotronics's widgets are smaller than a breath-mint. Such innovation is lucrative; every kilogram saved makes a satellite $15,000 cheaper to launch. Nuvotronics is part of a cluster of high-tech firms that have increased Durham's GDP per person by 28% since 2001. By the same measure, North Carolina as a whole grew by just 3% over the same period. Durham's success reflects an emerging trend: high-flying cities, and the successful firms they contain, are detaching from the rest of the economy. Cities have long been the most productive places to do business, because they bring firms, customers 36 | www.cedmagazineng.com March 2016
and workers closer together. A banker in New York is only a taxi ride away from her clients; a new restaurant there immediately has 8.4m potential customers on its doorstep. Where clever people congregate, innovation results. For the most successful cities, these advantages seem to be getting bigger. In 2001 the richest 50 cities and their surroundings produced 27% more per head than America as a whole. Today's richest cities make 34% more. Measured by total GDP, the decoupling is greater still, because prosperous cities are sucking in disproportionate numbers of urbanising Americans. Between 2010 and 2014 America's population grew by 3.1%; its cities, by 3.7%. But the 50 richest cities swelled by 9.2%. Durham, whose population grew by about 7% in that period, provides some hints as to what makes a place flourish. The city thrives on its proximity to three
leading universities-Duke, North Carolina State and the University of North Carolina. Far-sighted planning in 1959 led Durham and its close neighbours, Raleigh and Chapel Hill, to establish a research park between the three cities. The idea was to coax the universities' boffins into business ventures. It worked; today 50,000 people work there. Unlike much of America, the area has not shied away from infrastructure investment. Raleigh-Durham airport has been renovated with a helping hand from local businesses. The roads are well maintained, if a little crowded. Bill Bell, the city's mayor, hopes to develop a light-rail system for the city; in 2011 voters approved a sales-tax increase to help pay for it. Investment has also revitalised a deprived downtown area. For most of its history, Durham made tobacco and textiles. When those industries went into decline in the latter half of the 20th century, they left a vacuum in the city. But over the past decade the gap has been plugged. The tower of the old A m e r i c a n To b a c c o f a c t o r y, emblazoned with the "Lucky Strike" logo, still stands-but the factory is now a
he Habitat 111 African Regional Meeting on Friday said it would advance global partnership to facilitate implementation of the New Urban and Human Settlement Agenda. This was contained in a Communique tagged 'Abuja Declaration for the United Nations Conference on Housing and Sustainable Urban Development' at the end of the meeting in Abuja. The theme of the meeting was: ''African Priorities on New Urban Agenda.'' The declaration, which represented African common front for the New Urban Agenda, was made on behalf of participants by Mr Babatunde Fashola, the Minister of Power, Works and Housing. It said that African continent would mobilise financial resources to enhance multi-stakeholders engagement for the effective implementation of the new urban agenda for cities and human settlements in Africa. It would also enhance capacity building, skills and technology transfer for sustainable urban and human settlements planning and management. ''We commit to promote the principles and recommendations included in this Abuja Declaration for Habitat 111. ''We will ensure that this contributes to the upcoming Third Preparatory Committee meeting to be held in Surabaya in July 2016.'' The communique stated that it would harness the potential of urbanisation to accelerate structural transformation for inclusive sustainable growth. It noted the need to allocate financial
HABITAT 111:
ADVANCING PARTNERSHIP Africa to facilitate implementation of new urban agenda
Dr Joan Clos, Secretary-General, UN Conference on HSUrbD
resources to promote sustainable urbanisation and human settlements development to drive transformation
for all citizens. "This should include promotion of land titling and registration as well as resource generation through land base revenue and land based revenue and land value capture.'' The communique stated the need for promoting Green Building and infrastr ucture technologies and application of designs which mitigated climate change and adapted to its impact, including urban heat island effect. It also called for fostering the utilisation of sustainable renewable energy and natural resources as well as investment in low carbon production systems in urban centres.
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WATERENERGY QUALITY
COVER OIL ANDFEATURE GAS REPORT
TWIN OXIDE (PURE CHLORINE DIOXIDE) PURE, SAFE AND ENVIRONMENTAL FRIENDLY REPLACEMENT OF CHLORINE A PERFECT AND INNOVATIVE WAY TO DISINFECT WATER AND CLEAN THE DISTRIBUTION SYSTEM FROM BIO-FILM (ALGAE) Water treatment is traditionally on the largest application in the field of disinfection. Twin oxide is the 21st century alternative to traditional chlorine based water disinfectants which have been used for more than hundred years despite their safely risks and adverse effect on health and environment. Twin oxide is highly powerful, safer, eco friendly, more efficient and effective product to apply in the treatment and management of water for human, environmental, commercial and / or operational uses. Twin oxide is delivered in power form, a transportable powder kit of two components that, once added to a specific volume of water, reacts into a chlorine dioxide solution with a concentration of 0.3% (3,000ppm) that is applied in drinking water. Twin oxide 0.3% solution is 10 times more powerful than chlorine and chlorine-type disinfectants and 2.6X more oxidation power. RESEARCH: Scientist all over the world has discovered the negative effects of the continuous use of chlorine to treat water. Chlorine has been found to have among others the following limitations: 1. Chlorine does not remove algae and bio-film, which is a permanent source of contamination within the pipeline network. 2. Chlorine does not kill all micro-organism in water 3. Chlorine generates hazardous by-products like THM, HAA, Mutagen x (agents that cause cancer) 4. Chlorine does not remove iron and manganese in water. 5. Chlorine has short residual disinfection capacity(4-6 hours only) and it generates “FREE CHLORINE” 6. Chlorine is corrosive and hazardous to transport, store and use
T
he Smart City concept refers to a new paradigm for urban planning and management, based on the intensive use of ICT, aimed at achieving better cities from a holistic perspective that encompasses social, economic and environmental aspects. It is, in short, a model that advocates the use of new technologies to get more livable cities within an evolutionary framework that ensures their sustainable development. T his emphasis on social and environmental aspects makes the Smart City model to 14 | www.cedmagazineng.com March 2016
SMART CITIES A global initiative to encourage world’s cities to became “Smart” has been hailed by built environment professionals, and are united on the need for Nigeria to start focusing on building smart cities
MICROBIOLOGICAL AND CHEMICAL ADVANTAGES OF TWINOXIDE Hence, extensive scientific research and certification offered the introduction of Twin oxide (Pure Chlorine Oxide). ü A powerful disinfectant, 99.9% effective against all waterborne micro-organisms (spore forming bacteria, viruses, protozoa, fungi, legionella, yeast, cryptosporidium etc.) ü 260% more disinfection power compared to chlorine ü 10 times more oxidizing power than chlorine ü Long residual disinfection capacity (up to 72hours) ü Does not form mutagen X, THM's HAA's (100% SAFE) ü Very effective within a broad PH range (PH 4 -11) ü High efficiency in the removal of iron and manganese ü Destroys algae-related taste and odour (NO TASTE, NO SMELL) from algae or H25 ü Effectively removes bio-films and legionella ü Very short contact time (2-10minutes)
ü Easy to transport, stock and safe to use DELIVERY MECHASNISM OF TWINOXIDE ü 5years guaranteed shelf life powder form ü Solution is stable for 30 days ü Highly soluble in water ü Easy to apply ECONOMIC ADVANTAGES OF TWINOXIDE ü More disinfection, less chemistry ü No corrosion ü No additional chemical ü Lower hazardous material transportation costs HEALTH AND ENVIRONMENTAL ADVANTAGES OF TWINOXIDE ü Unlike chlorine, twin oxide does not react with ammonia, ammonium ü Eco friendly, no undesirable residues ü Single product water cleaner and conditioner ü Effective against airborne pathogens when “Misted” ü Does not generate THM's, HAA's, AOX with toxic or carcinogenic properties CERTIFICATION Twin oxide is approved according to the world's most stringent national laws and regulations. Additionally, twin oxide meets the EU legislative frame work for biocides. Twin oxide is US NSF-60 approved & complies with US EPA drinking water standard, SON and NAFDAC. APPLICATIONS OF TWINOXIDE Twin oxide can be applied in virtually every where clean and safe water is required. These includes drinking water, waste water, food and beverages producer, hospitals, pharmaceuticals, bottle/sachet water companies, agriculture, livestock, poultry, fruit and vegetables washing, meat processing, the pulp and paper industries, cooling towers, the oil & gas industry, hotels, restaurants, cruise ships and marine vessels, swimming pools, hot tubs and spas, homes and offices, aquaculture etc.
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COVER FEATURE ENERGY
DEVELOPING STORY
construction. The survey reveals a high percentage of green building projects currently underway in the country. South Africa has registered the impressive results through commitment. And according to the report by Dodge Data & Analytics and United Technologies on World Green Building Trends 2016, the country's respondents abide by the fact that green activity so far is just laying the groundwork for an overall shift in the market. The report also says that if South Africa continues to commit itself to the green building trend, the country will be a leader in the global green market in the next few years. The report finds that internationally, many companies are expecting their building projects to be certified green by 2018 and this will lead to an increase of 37 percent. Meanwhile respondents in South Africa indicated that 41 Kenya constructs largest w ater project in semi arid ar ea percent of their work is already green. Green Building Council South Africa CEO, Brian Wilkinson says South enya is constructing the largest water for the project. project in semi arid area that will Africa will continue to outperform with “The water project the largest in the supply water and electricity to country will provide water to irrigate almost two thirds of respondents millions of residents, Water Cabinet 40,000 hectares of land in this region," expecting more than 60 percent of their Secretary Eugene Wamalwa has said Mr Wamalwa. projects to be green by 2018. announced. Residents are expected to be paid as According to the report, South Thwake Dam at the confluence of soon as the Tanathi Water Services Board African green building is driven by an Thwake and Athi Rivers will supply water completes verification of plot ownership acknowledgement that green building is to over one million residents of and sizes. the right way to go, rather by regulatory Machakos, Makueni and Kitui counties as Residents affected by the project, will be requirements as seen in international well as generate 20 megawatts of paid Sh180, 000 per acre. countries such as Australia, UK and electricity to power Konza Tech City in Political leaders have hailed the project Singapore. Makueni County. as the much needed impetus for Wilkinson adds that this is a Largest water project in semi-arid area economic growth the region needed. testimony to the work being done by that is set to be constructed in Kenya is a However, they want the government to the GBCSA. Vision 2030 flagship project and is jointly prioritise the irrigation component over Founded in 2007, the GBCSA in funded by the Kenyan government and the generation of electricity and commit the African Development Bank. to undertake other projects to ameliorate 2009 certified South Africa's first The Kenyan government has already the residents from the ills that could come green building project. The council set aside Sh2.8 billion to compensate from the completed dam. certified its 100th building project and residents whose land would be acquired to date, it boasts 167 certified projects. "Green building practices in South Africa are gaining momentum, besides the acknowledgement that South Africa leads pack in Green Star-certified projects are not adopting g reen construction only world-class and innovative but of great benefit to people," says new survey by World Green Wilkinson. Building Trends 2016 has listed South Africa as one of the leading global performers in green
ALL FOR WATER
K
GOING GREEN
A
34 | www.cedmagazineng.com March 2016
be perceived as more than just a technological concept. From the technical point of view, the Smart City model considers the city as a complex system made up of citizens, resources and services. The status of each service is monitored through a layer of sensors, which send the captured data through the appropriate communication network to an analysis platform. The results of the analysis are then used for the service managers for making decisions to optimize the service. There are numerous examples of Smart City services that have proven success for improving the efficiency
public utilities such as electricity grids, gas networks, drinking water networks, sewage systems, street lighting, and public telecommunications networks. The use of ICT for intelligent monitoring of such assets can result in an improvement in the services provided to people in terms of availability, efficiency or safety. For example, a sensor network can facilitate early detection and precise location of faults such as gas leaks, broken or clogged pipes, or the presence of contaminants in the drinking water network. It is also possible to consider an intelligent system to automatically control the
street lighting, turn on/off lampposts based on the ambient brightness or even the presence or absence of people in the vicinity. Similarly, the use of a network of sensors and actuators can be considered to automatically regulate the intensity and frequency of watering in parks and gardens depending on weather conditions. The concept of Smart City services encompasses more than those offered by the utilities. Thus, other services that can be improved under the Smart City paradigm include those provided by public safety agencies (police, fire, ambulance), public transport systems (metro, bus), garbage collection and recycling services, public health system (hospitals and clinics), etc. Thus, for example, the availability of video surveillance cameras and the ability to control traffic lights in realtime, can improve the work of the police, fire service or ambulances in an emergency. Using the Internet to apply for appointments in the public health system is a reality in many European cities. In the area of waste collection, devices monitoring the occupancy of containers can provide real time information to optimize routes of pickup trucks. So, for example, some cities have implemented a waste collection service that requires the identification of the user (individuals or companies) accessing the container, adapting the service fee to the volume and type of the generated waste, and promote correct separation at origin. The use of the Internet in the eGovernment area is also considered a Smart City indicator. Thus, there are many municipalities that allow people to perform various administrative procedures (e.g. pay taxes, apply for licenses) by electronic means. In India, President Nahendra Modi government's vision of creating 100 smart cities will require an investment of over $150 billion over the next few years, with private sector being a significant contributor, says a report. According to Deloitte, nearly $120 billion will come from the private
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DEVELOPING STORY
COVER OIL ANDFEATURE GAS REPORT
sector. The government has already initiated two programmes with an initial outlay of $7.513 billion for 'Smart Cities Mission' and the 'Atal Mission for Rejuvenation of Urban Transformation (AMRUT)' for the upgradation of 500 existing cities. "Even as funding for these smart
cities is an area of concern, the major challenges remain with respect to the development of smart cities project management, government decision making and policy and regulatory framework," Deloitte India's PN Sudarshan said. The government recently announced the list of first 20 cities to be developed
AFRICA’S SMART CITIES
B
uilding complex databases and de ploying sophisticated algorithms in real-time may seem a high-tech approach far removed from the capabilities of Africa's cities. Yet cities like Lagos, Accra and Nairobi are already putting this approach in place, as municipal administrators increasingly buy into the idea of smarter cities. Defining the Smarter City For some critics of the 'smart city' movement - in particular those people who believe conspiracy theories are not that far from the truth - the idea immediately evokes visions of an urban dystopia: a world ruled by cyborgs, insidiously and invisibly controlled by an intelligent super-computer. More pointedly, others, urbanists in particular, have argued that this buzzword, and the frothy discussions around it, mask a form of tech-driven imperialism, as overwhelmed African 16 | www.cedmagazine.com March 2016
planning authorities look to Western technolog y fir ms for one-stop solutions to the challenges facing their fast-growing cities. Still others, such as local communities concerned over basic services and infrastructure, have expressed concern about the high cost of the proposed changes. Their worry is
as 'smart cities' with Bhubaneswar topping the list followed by Pune, Jaipur, Surat, Kochi, Ahmedabad, Jabalpur, Vishakapatnam, Sholapur, Davangere, Indore, New Delhi, Coimbatore, Kakinada, Belagavi, Udaipur, Guwahati, Chennai, Ludhiana and Bhopal. While several cities have made incremental investments in smart solutions, the challenge will be to replicate these on a larger scale, he said. According to the study, in 2016, service providers and over-the-top content providers will invest heavily in city- wide Wi-Fi networks which will be the back-bone for smart city services. "As smart solutions are heavily dependent on ICT, service providers will play a significant role in smart cities. In 2016, service providers will participate in (and lead in many cases) consortiums for responding to RFPs for smart or digital solutions for various city and state governments," Sudarshan said. that funding smart-city technologies will take away public money from more traditional, concrete for m of infrastructural investment - like roads and services - that have more tangible impacts on the lives of urbanites. According to Jonathan Batty, IBM's C o m mu n i c a t i o n s M a n a g e r f o r Emerging Markets, these objections miss the mark. "There are lots of different definitions of the smarter city,
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BUDGETING FOR FUTURE A real win for metropolitan areas in 2017 transportation budget
W
hile the President Obama's 2017 budget was a political non-starter even before its release, analysts nonetheless attempted to divine the future of federal policy from its contents. That was certainly the case for the transportation portion. A new $10-perbarrel oil tax garnered significant media attention, especially since it would effectively more than double the federal gas tax. Other stories noted the significant commitment to electric vehicle innovation, heightened transit investment, and commitment to clean transportation. All massive policy changes, to be sure. What received far less attention, however, was a new program that-beyond just the money-promised to actually change how the federal government does business. The 21st Century Regions Grant Program is the most important proposal you may not have heard about, and it finally represents a commitment to metropolitan areas consistent with their economic
importance. For perspective on the scale of this program's innovation, compare it to how the current surface transportation program operates. The vast majority of total federal spending gets directed to states through formula programs: 73 percent of total roadway and transit spending in 2015.* States also maintain near sole authority on where to invest formula funds within their borders, and the selected projects don't require economic, social, or environmental justification. For the relatively small amount of funding delivered via competitive grants-notably, transit capital and TIGER-only single projects receive awards. Finally, outside relatively small metropolitan planning grants, spending is mode specific. The 21st Century Regions Grant Program is a major departure from this setup. First, it sends grants directly to metropolitan governments, giving them control over spending decisions. Second,
it's a competitive program that will base awards on demonstrated metropolitan need and offer simultaneous support for related projects. Third, the program explicitly looks to fund integrated transportation solutions and break down modal silos. The proposed funding would immediately make it a major component of the federal portfolio. Funding ramps up from $1 billion in 2017 to $6.5 billion in 2018, and then annually averages $8.8 billion between 2019 and 2023. That average is larger than all but two highway formula programs and only $3 billion less than the entire Federal Transit Administration budget in 2016. This isn't a token program-it could have real effect on the ground. Combined, these features will incentivize all metropolitan areas to plan collaboratively, use rigorous performance benchmarking, and think about how transportation interrelates to broader outcomes. It should have far-ranging impacts on how metro areas prioritize specific projects, ideally leading to more multi-project efforts like Chicago's CREATE program. Secretary Foxx and his team deserve credit for proposing this kind of policy approach. And they couldn't be more explicit about the pressing need. Tucked deep within a Budget Estimates document, the department states: "Metropolitan regions receive insufficient funding, despite having the majority of the population, producing the majority of national GDP, and being best positioned to make investment decisions to optimize existing assets and expand multimodal travel choices." The 21st Century Regions Grant Program may not receive consideration on Capitol Hill this year, but the policy signal is clear. It's time to recognize we live in a metropolitan nation
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ENGINEERING A & A
BUILDING MATERIAL
Performance table
year. Lafarge Cement Wapco Also, its new facilities in Tanzania, Republic of Congo, Ghana, C么te d'Ivoire, Sierra Leone and Liberia are expected to begin operation in 2015/2016. Besides, Dangote has only recently
LafargeCement Wapco
announced an additional nine metric tonnes of cement plants in Itori, Ogun State and Okpella, in Edo State. Analysts at New Mail Online expect both companies to post growth sales by the end of current financial year and continue to expand to more Africa countries.
We particularly project that Dangote cement will surpass EPS of N9.8 posted in FYE 2014 while Lafarge is likely to remain flat. Overall, shareholders in both companies are expected to be rewarded better than 2014 by the end of ongoing financial year ending December 2015. Agenc y Repor t and News Mail
FEAR OF ABANDONMENT Dangote won't abandon Okpella cement plant, monarch tells protesting youths
F
ollowing rumours that Alhaji Aliko Dangote has jettisoned his planned investment in cement plants at Okpella in Edo State, youths in the community at the weekend staged a protest to the palace of the paramount ruler of Okpella Kingdom, Alhaji Yesufu Dirisu urging him to ensure Dangote Cement commences construction without delay. Hundreds of placard carrying youths on motorbikes and bicycles stormed the palace insiting that the monarch should clarify the situation as it has taken too long for Dangote Cement to register its presence in Okpella. Alh. Aliko Dangote, President, Dangote Group
32 | www.cedmagazineng.com March 2016
Some of the placard read "All we are saying, let Dangote Cement come to Okpella", "Okpella youths earnestly ask for Dangote Cement'' and "Okpella Chief and Elders, Please beg Dangote come here. We are waiting for Him" Dangote Cement had recently announced plans to commence a three million tonnes per annum production capacity cement plant in Okpella along with another six million metric tons capacity plant in Itori, Ogun state. Speaking at the Palace, the President of the Okpella Youths Forum, Christopher Kadiri said the protest was informed by information reaching the youths that Alhaji Dangote has changed his mind to start cement operations at Okpella at a time the youths were already expecting that more jobs are coming to them. He said they decided to come to the palace to hear from the Chiefs and elders
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COVER FEATURE
and as a technology company, IBM has its own flavour. For us, "smarter cities" is all about data: how you mine it, leverag e it and ultimately use it to make better decisions about how to run your city and to provide better services to citizens. It's about optimising what you have already got and doing more with less," he said. Of the 16 cities announced as grant-winners in IBM's Smarter Cities Challenge this year, three are in Africa: Abuja, Durban and Mombasa. Like their predecessors, they were selected through a competitive process based on open nominations to the IBM central office. The winning cities will welcome teams of staff from IBM branch offices across the world. These executives and experts will offer pro-bono advice to municipal authorities, private sector leaders and community stakeholders on how to deploy smart-city technologies. Of course, the exercise is also an opportunity for IBM to plant seeds in the minds of business and government workers, who perhaps are then more likely to roll out these plans using the company's own services and products. According to Batty, there are no obligations or conditionalities enforced by the technology vendor once recommendations are delivered. Emeka Okoye, a Nigerian-born "techpreneur" and open-data advocate, is one of the sceptics of the top-down smart-city proposals being put forth by Africa's public officials and their partnering global technology firms. "A critical aspect often glazed over is communities having a voice in what their cities should be like," Okoye said. Giving citizens open access to the data collected for these programmes, he said, would "simply make information and data used to make decisions
available to the public for the stakeholders to add wisdom and expertise to. A smart city makes urban governance agile based on feedback from the citizens and uses lowcost technologies to achieve high results." True to his word, since 2010, Okoye has developed several software programs that use open data to help citizens keep tabs on their governments. Perhaps the best known is ReVoDa, a mobile phone application designed for Nigerian activist platform Enough is Enough, and which "turns citizens into election observers". Okoye has designed similar platforms for referendum and election processes in Liberia and Ghana. However, when it comes to planning a city, not all believe in the wisdom of the crowd, and though IBM relies on indigenous knowledge for its smart city programmes, the commercial IT firm has steered clear of the murky waters of politics. Making African governments more transparent and accountable is important, but telling local officials
when it comes to planning a city, not all believe in the wisdom of the crowd, and though IBM relies on indigenous knowledge for its smart city programmes, the commercial IT firm has steered clear of the murky waters of politics.
where problems lie does not necessarily help to fix them. The Big Picture As the chief scientist of IBM Research Africa and a self-professed 'social geek', Dr Uyi Stewart sees big-data solutions as a way to address Africa's major challenges. "Smarter planning was meant for Africa," he said. "In the past, African countries have been too reliant on donor money, which doesn't give enough incentive to make a buck." According to Stewart, sustainable, independent development is easiest when projects pair a commercially viable framework with a social agenda. "I'm looking for a blueprint for commercialisation in Lagos. And once I have it, I want to use it to build a framework to create more jobs, business oppor tunities, better healthcare and improved services," he said. From his base at the research lab in Nairobi, Stewart and his team of researchers are brazenly taking on ch a l l e n g e s f r o m s e c u r i t y a n d sustainable energy to employment and climate change. The team's objective is to generate a whole new line of management technologies originating in Africa and made for Africa, but applicable to a global market. It remains to be seen what the uncompromising optimism on display at IBM will yield,
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COVER OIL ANDFEATURE GAS REPORT
and whether the company's move to demonstrate its commitment to the region will help it to edge out competition in the future. IBM has deployed 10 teams to Ghana over the last five yea rs, a mo n g t h e m t h e Smarter Cities Challenge team. Another IBM team is due to work on Ghana's health service with Yale University later this year, where it will use data analytics and high-performance computing to support a program that tests, treats and tracks HIV-positive pregnant women in Ghana. And this is just the beginning of IBM's plans for Africa. Enter stage right: Project Lucy, a $100 million programme launched in January 2014 and which will take IBM's latest advancements in cognitive computing to real-world challenges. According to Stewart/IBM, Project Lucy takes a human's most attractive features rationality, morality and empathy - and marries these with what machines are best at: high storage capacity, quick retrieval and a memory immune to time. It simply uses technolog y to approximate the gaps in our cognitive abilities, allowing people to be assisted in a way that scales. "I challenge anyone in the world - Africa can compete. We just need to get organised," said Stewart. Getting Smarter Without reliable data, however, Stewart's lab will realise none of its high ambitions, regardless of how state-ofthe-art its technology is. How can gaps in information coming out of African cities - not to mention the non-standard and un-digitised for mats such information tends to come in - be reconciled? The answer lies in more data, or rather plugging into multiple 18 | www.cedmagazineng.com March 2016
BUILDING MATERIAL
and at times unconventional forms of data. With reportedly three subscriptions for every four people in Ghana, GSM technology is another workable source of data. Take winding traffic queues, for instance - a problem increasingly synonymous with Africa's major cities. When it comes to traffic management and transport planning, mobile phone data is particularly useful: mobile devices are pervasive and typically kept on one's person, making is easier to monitor and analyse movements. Seeing this potential, in May 2012 the Accra metropolitan planning authority approved plans for a central control tower to monitor and regulate traffic flow. With help from big data and cloud-computing technologies, Accra's transport officers can use mobility patterns and analysis based on mobile phone signals during rush hour to inform intelligent traffic management. But with 70 percent of Accra's commuters using local minibuses or tro-tros, and the low quality of roads
IBM has deployed 10 teams to Ghana over the last five years, among them the Smarter Cities Challenge team. Another IBM team is due to work on Ghana's health service with Yale University later this year, where it will use data analytics and high-performance computing to support a program that tests, treats and tracks HIV-positive pregnant women in Ghana
contributing to the infuriating congestion issues, city administrators will have to phase in both hard and soft solutions. CCTV is another very powerful source of data for monitoring traffic systems and flows. For example, in Nairobi, IBM uses big data analytics to mine footage from CCTV cameras around the city. Even though there are only 16 traffic cameras, by using mathematical models to build analytics, engineers are able to infer the missing network coverage. In Nigeria, IBM Research lab is looking to work with a commercial mapping company, Virtual Streets, to uncover the wisdom of the country's motorists. Sensors mounted on vehicles can detect potholes and speed bumps, allowing a rebasing of available mapping data to better estimate journey times. Surface conditions, flooding caused by poor drainage systems and insecurity can all have a highly significant impact on journey time; racking devices help create a comprehensive view of the city by adding a richer layer of information than what a reliance on mobile data can.
It means Dangote was able to generate income of 33 kobo from every N1 worth of asset deployed. Similarly, Lafarge Africa total assets turnover ratio of 0.54x in the review period, suggesting a more efficient use of assets than Dangote Cement. Performance table
By implication, Dangote retained 44 kobo on every 100 kobo of sales in the last nine months while Lafarge Africa retained 17 kobo from every N1 of sales. Cost of sales is evidently heavy for Lafarge Africa. Return on equity (ROE) which reveals how much profit a company earned in comparison to total amount of shareholders' equity, sees Dangote Cement recording 25 percent RoE compare to Lafarge's 49 percent. Assets Quality Analysis shows that both cement companies' assets are not yielding reasonable income as at the review period, ass reflected in the total assets turnover ratio which stood at 0.33x and 0.54x respectively.
Liquidity Liquidity ratio shows that both companies' assets quality needs to be improved upon. Dangote cement's current ratio (a ratio which shows the relationship between current assets and current liabilities) stood at 0.59:1 in nine months compare to Lafarge's 0.95:1. The figures indicate that both
Lafarge, which had increased its capacity from 3.0 million metric tonnes to 8.0 million metric tonnes, said it would be making new investments in the next few years to double its capacity and strengthen its position to become a leader in the Nigerian cement industry. On the other hand, Dangote Cement has already started delivering on its promise to become a truly Pan-African manufacturer.
Future Outlook After it successfully integrated its operations in South Africa and Nigeria to create Lafarge Africa, Lafarge had revealed plan to double its production capacity in Nigeria as part of a new expansion programme that would see additional investments by the foreign majority shareholders in its Nigerian subsidiaries. Performance chart Lafarge, which had increased its capacity from 3.0 million metric tonnes to 8.0 million metric tonnes, said it would be making new investments in the next few years to double its capacity and strengthen its position to become a leader in the Nigerian cement industry. On the other hand, Dangote Cement has already started delivering on its promise to become a truly Pan-African manufacturer. Its plants in South Africa and Senegal became operational while plants in Zambia and Cameroon were commissioned in the 2015 financial
Glitches in the System Piling on layers of information when looking at an issue like traffic can make it harder to see patterns and predict the effects that changes to the system will have. Keeping up with the large volumes of data and speed of collection can be a challenge. Here, IBM combines cloud computing with big data, which also allows traffic controllers to adjust algorithms to unavoidable circumstances that may vitiate incoming data - for example, the effects of turbulence on surveillance cameras. But not all problems can be dealt
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companies could not meet up with their short- term financial obligations as at when due.
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ENERGY BUILDIG MATERIAL
CHANGING DYNAMICS The big battle for Africa's cement market
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hough high cost of sales continue nine months as against N29.5 billion to pose threat to profit and posted by Lafarge Africa. The nine dividend of listed equities, months results only re-emphasised particularly those in the building Dangote Cement leadership position in sector of Nig erian Stock the industry. Exchange, the duo of Dangote Cement Further breakdown of the report and Lafarge Africa, manufacturers of shows that Lafarge Africa Plc's pre and Elephant brand of cement, still remains post tax profits dropped in the third investors' toast in the industry. quarter as the cement company Both companies continued to show struggled with slow sales and rising resilience in the face of the seemingly costs. harsh operating conditions in the Key extracts of the nine-month earnings country as key performance measuring report of Lafarge Africa for the period indices continue to grow. ended September 30, 2015 showed that Going by absolute financial figures sales rose marginally by five percent to and ratios generated from both companies' nine month audited financial report for the period ended September 30, 2015, one could confidently argue that both Dangote Cement and Lafarge Africa are leaders in the cement industry in Nigeria. However, comparatively, peer to peer analysis of both companies shows that Dangote Cement seems ahead of Lafarge Africa as the company posted after tax profit of N157 billion in Dangote Cement Cameroon rolls out 30 | www.cedmagazineng.com March 2016
COVER FEATURE ENERGY
N168.14 billion in third quarter 2015 as against N159.4 billion recorded in comparable period of 2014. Lafarge Africa result seems worrisome considering the fact that the company had just completed its merger with its local and regional entities to become Lafarge Africa. The merger, an obvious response to check growing strength of Dangote Cement. Return on Investment (ROI) Each share of the Lafarge Cement Plc generated an average of 110 kobo per share in the last two years against Dangote Cement's average Earnings per Share (EPS) of 96 kobo in the same period. On the average, Dangote Cement has rewarded its shareholders better than Lafarge Africa with 80 percent of profit paid out as dividend as against 57 percent by the latter. Earnings Growth Following the consolidation, Lafarge Africa's revenue grew by just three percent year on year. This is similar in comparison to the Q3 2015 results which saw revenues grew by single digits (five percent). This also might suggest that the flat revenue growth may have been the result of its regional operations which are growing at a slower pace. Revenue growth is critical to the cement industry and this should get shareholders worried. In the case of Dangote Cement, revenue grew by 18 percent, moving from N310.2 billion in Q3 2014 to N365.5 billion in 2015. Despite Lafarge consolidation, Dangote Cement still dictates the space and controls, substantially, market share having earned N197.3 billion more than Lafarge Africa sales. Lafarge Africa's ability to convert sales to profit recorded a decline during the review period, as profit margin stood at 17 percent compared with Dangote's 44 percent in the same period. Performance chart
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with in the lab. Current budgetary processes inhibit the sharing of resources, including data. In fact, political culture, which tends to be partisan, does not readily lend itself the hard logic of computer models and the holistic thinking essential for smart cities. This issue is of course not exclusive to African cities, where collaboration can, and does, happen. However, it places a particular strain on smart city initiatives that do not adhere to the tidy ministerial portfolios, particularly given the understandable reluctance of IT firms to engage with politics. That technology companies nominally take a problem-centric view, regarding innovation as a means to an end, certainly helps in rolling out targeted solutions. But it may be that the inherent reductionism of computer models, which must extrapolate and generalise data, conflicts with the very nature of the city and with the serendipity that draws us to it. Moreover, smart city initiatives tend to be exercises in top-down management than bottom-up innovation, since the data these initiatives use often depend on formal channels rather than crowdsourcing activities. Collaborations between big technology firms and small businesses, including the one between IBM and Virtual Streets, could help reverse this pattern. As Stewart said: "I believe the
greatest legacy for this generation is to level the playing field by creating access to information. Most entrepreneurs in cities like Lagos work in fragments and closed circuits. We can do so much more by shifting to a networked approach in which businesses cluster together under a technology glue to exchange resources and leverage off one another. This is the promise of Project Lucy." For Emeka Okoye, the key phrase is "the World Wide Web" - not a hierarchical eco-system but a democratic cyberspace. "We really need to think about viable ways to opt people into the smart cities programme," Okoye said. "They will tell you where
their problems are. It's important to tailor solutions to specific problems or sections of the city using smaller components to create a wide network of applications." Despite all of this, there remains one big question mark hovering over the smart city approach: What types of cities we want to live in, run our businesses from and raise our families in? The technologists, planners and entrepreneurs who are making Africa's cities smart must ask not whether technology can solve all of Africa's problems but rather, whether we will be willing to live with our own creations. By Our Correspondent with Agency Report
From The Publisher Continued from page 5 repairs can be tweeted. Sweden has verksamt.se, both for entrepreneurs and for citizens to use theme-based portals on healthcare, taxation, etc. All procurement and invoicing is conducted electronically, restricting corruption. Land titling Providing affordable housing remains a critical challenge. This has been exacerbated artificially by poorly conceived Central, State and local government regulations, leading to land prices that are much higher than intrinsic levels. Urban development projects still have to undergo a lengthy approval process - developers have to spend 6 months getting permissions from nearly 10 departments. Titling issues and the lack of property rights information make this worse. While the law requires compulsory registration of the sale of land, it does not ask the registration authority to verify land history or ownership from the seller, weakening buyer protection and acting more as a fiscal instrument for the state, instead of a statutory support of certainty to title. Cities recognise presumed ownership to land, a
questionable claim, which can be challenged on many fronts. A smart city would provide formal digitised recognition of property titles, along with increasing transparency and registered brokers, cutting down long search times and high costs of acquiring real estate. A less cumbersome process of accessing land records through the Department of Registration would increase its use, while helping to show actual transaction prices. Further, land inventory needs to be mapped comprehensively, and be accessible to buyers. Globally, many countries offer streamlined online processes and incentives to facilitate affordable housing - these can include tax deductions, density bonuses, direct subsidies, land grants, land use changes etc. Many countries such as Malaysia and Canada have revamped their administrative requirements through fee waivers and fast-tracking procedures. Smart cities can make daily life easier for residents simply by automating routine functions, and providing a basic transportation and housing network. www.cedmagazineng.com March 2016 | 19
OUTSTANDING QUANITY SURVEYING FIRMS ENERGY
DEVELOPING STORY OIL AND GAS REPORT
AVERTING DISASTER Ensuring building integrity and averting building collapse Civil Engineers caution against quack developers. Temitayo Adetoba writes
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tructural integrity since the recent collapse of the Lekki building has been under high questioning. Though a lot of building collapse cases has been heard of, a lot has been attached to this particular case probably because of its prominence among various estates around the Lekki metropolis. Nonetheless, these incessant cases of building collapse has become an ugly situation that has been affecting the construction industry for too long, and it seems that there are no options to exhaust in bringing about solutions. To counter this opinion, the Nigerian Institution of Civil Engineers being a major stakeholder in the built environment, expressed its displeasure Engr. Robin James Owivry Chairman, NICE in the recurrence of this ugly situation project should not be embarked on despite the pool of civil engineering without the involvement of a qualified resources present in the country. civil/structural engineer; anything According to the Chairman of the short of this is an abuse of Institution, Engr. Robbie James construction ethics, and the result Owivry, Nigeria has come a long way to could be catastrophic. As part of the be grappling with man-made problems institution's commitment to the of this nature whereas, other regions of eradication of building collapse in the world are battling with the Nigeria, it is offering to render the challenges of natural disasters such as ser vice of recommending civil flooding, landslides and earthquakes. engineers for construction projects at “Infiltration of the construction no cost to members of the public in industry by people who do not order to eliminate the frequency of ordinarily have knowledge of the building collapse in our society. industry at the expense of trained The institution has vowed to fight professionals is a major cause for back at the charlatans who are trying to concern and I think the time has come bring down its noble profession to for us to have a considerable thought for this menacing situation. The negligent attitude of the public in patronizing developers indiscriminately calls for caution. Proper investigation needs to be carried out on the profiles of patronized developers to ascertain that they have qualified civil engineers in their teams of projects executors�. Any high profile housing Collapsed building 20 | www.cedmagazineng.com March 2016
disrepute. The Nigerian engineer is as capable to deliver his job accordingly as or even more than an expatriate would. Therefore, there is no cause for worry as far as the competence of the indigenous engineer is concerned. The National Chairman further stated that as far as building collapse cases are concerned, no single civil engineer has been indicted till date, only non-engineers parading themselves as engineers have been found guilty. He sounded a note of warning to those bringing shame to the noble profession that it will no longer be business as usual, as the institution has plans to put machineries in place to checkmate undue infiltration into the construction industry. Structural integrity of buildings/erected projects is a major concer n for civil engineering professionals, and the lack or inadequacy of it has overstayed its welcome in the industry. However, the institution is also endearing the public to patronize professionalism in every spheres of construction, as building collapse cases can only be reduced in this manner. The total cost of following the necessary procedures and tests to be carried out on construction sites before project execution begins is inconsequential to the sum of project cost; it should therefore not be a hindrance to maintaining structural integrity. These building collapse cases can always be averted, and the Nigerian Institution of Civil Engineers, has pledged its allegiance to the aversion of these cases. Presently, the institution of civil engineers through its Failure and Appraisal Investigative Committee is cur rently car r ying out an independent investigation on the details of the collapse and the final submission will not only be made public after concluding the investigations, recommendations will be made to appropriate authorities for necessary punitive measures against those responsible and to serve as a deterrent for its recurrence in the future.
our services, to study the deviation or compliance to programme and budget for works under execution and offer remedial actions, to evaluate completed projects and prepare documentation for the projects. The firm implementation strategies are; the firm gives appropriate training to its staff on projects within the scope of services of the company, it establishes means of Monitoring and Evaluation of Projects through setting off Target against Actual execution at progress and completion of projects, the application of latest technology to offer better services to our clients, continuous recruitment and training of staff to meet the challenges of up-tot h e - m i n u t e t e c h n o l o g y, t h e management also organized Facility Management Schemes for willing clients on completed projects. The key areas of business at DWAB Costprudence Company: BUILDING WORKS : Building and Infrastructure Development, Rehabilitation and/or Restoration of Buildings and Infrastructure. Building includes Residential, Commercial, Office buildings, Hotels, Bank buildings, Schools, Churches and Mosques, Airport and Seaport Terminals, Bus and Rail Stations and Terminals, Hospitals, Municipal Buildings and Recreational Facilities
Shoreline Protection e t c . H e a v y Engineering Pipeworks in Oil and Gas sector, Power and Telecommunication Facilities including civil works in offices and base stations as well as mast; works in Power Plants, Transmission and Distribution installations. WATER S U P P L Y A N D A Residential Development at Banana Island, Lagos DISTRIBUTION: This covers Water Supply including Reporting, Due Diligence Reporting construction of Dams, Boreholes and and Advice, Project Monitoring, Reservoirs, Water Reticulation and Project and Construction Management Water Treatment Installations. In all i n v o l v i n g o r g a n i z a t i o n a n d these our Professional Services will management of time, human and include among others the following; material resources, to achieve clients' Feasibility Studies and Appraisals, Pre- goals, Facility Management involving contract Cost Modelling and Planning; the continued management and and Establishment of Cost Budgets, maintenance of the property after Preliminary Cost Estimates and completion. Financial Statements, Establishing Cost Limits, Preparation Project Cost Control and Preparation of Contract Documents including Bills of Final Accounts In all the aforementioned project of Quantities, Pre-tender Estimates, areas, you can engage our Professional Tender Opening, Review, Analysis and R e p o r t i n g , P o s t - c o n t r a c t Services in any of the following; administration involving preparation Distinct areas: Quantity Surveying or of Monthly Interim Valuations, Cost Management Services including Periodic Financial Statements, Project Planning and Economic Studies, Cost Control and Preparation of Final Feasibility Studies and Appraisals, Accounts, Project Evaluation and Preparation of Tender and Contract Documents, Contract Procurements and PostContract Administration, Monitoring and Evaluation and Due Diligence Reporting and Advice, others are Project Management, Contractual Claims Management, Constr uction Management, Management Contracting, Facility Management etc.
URBAN DEVELOPMENT AND RENEWAL: New Town Developments and Urban Renewals including Layouts, Infrastructural Developments and Environmental Facelifts. HEAVY ENGINEERING: This will include but not limited to Civil Engineering Works in Roads and Railway construction, Stadiums, Aviation Control Towers and Runways, Marine construction including Jetties, Dredging, Kitchen and Dinning Project at Queens College, Lagos
DIFFERENCE www.cedmagazineng.com March 2016 | 29
OIL AND GASQUANITY REPORTSURVEYING FIRMS OUTSTANDING
DEVELOPING STORY Arc. Musa Sada, Minister of Mines & Steel
The duo of Dauda and Shonubi are building DWAB into a global big player
The DWAB duo - Biodun Dauda and Olayemi Shonubi
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WA B C o s t P r u d e n c e Company, is a firm with the mission to bring happiness and satisfaction to the built environment industry, most especially in the quantity sur veying practice in Nig eria. According to - James Freeman Clarke, which says "seek to do good and you will find that happiness will run after you." The firm was registered in November 2001, under the Companies and Allied Matters Decree 1990 of the Federal Republic of Nigeria. The firm was set up by a group of Professional Quantity Surveyors who have worked together as a team on a variety of projects in the Built Environment and Process Industry since 1989. The necessity to establish this team came as result of the need to handle more corporate projects having acquired vast experience and expertise over the years in the quantity surveying profession in particular and indeed the built environment in general. It is the resolve of these great minds and their desire to impart the wealth of knowledge and positive value gathered
towards the development of effective Cost Engineering in the Construction Industry that brought about DWAB Costprudence company and that impart is felt and seen everywhere across the country with the range of services the company renders. The services of the firm is not limited to, Quantity Surveying only but it includes; Planning and Economic
NASCON Palm Oil Refinery, Ijoka, Otta
Studies, Feasibility Appraisals, Detailed Cost Planning and Control of Projects, Cost and Procurement Management Consultancy etc; others areas the firm is known for are Project and Construction Management and Facility Management. The firm managed by qualified Quantity Surveyor, provide high standard professional ser vices comparable and obtainable in the industry today and anywhere in the world. At DWAB every work is carried out with up-to-date Information Technology. The team of professionals is well equipped with the knowledge of modern equipment to offer first class professional advice in the Construction Cost matters. The objectives of the organization is to offer professional services and expertise in the Built Environment sector; providing up-to-date professional services that ensure timely execution of projects conforming to set standards and within budgets. Others objectives include: To get the best and optimum satisfaction for our client on whatever job we are engaged in, to monitor the projects, its progress, quality of work and monitor its programme to ensure work is done according to programme, to provide well seasoned professionals to offer quality professional services for national projects for the betterment of Nigeria as a whole, the need to provide Facility Management services has become very necessary for Nigeria today and we are poised for this overdue service, to utilize modern technology for the efficient and timely delivery of
MAKING THE 28 | www.cedmagazineng.com March 2016
A BOOST FOR THE SECTOR Infrastructure development in Nigeria boosts construction industry
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igerian construction industry will continue to grow exponentially thanks to a parallel growth and expansion of infrastructure construction in Nigeria. This is according to a new report from Timetric's Construction Intelligence Centre (CIC). According to the report, the future is promising for the Nigerian construction industry with the industry's annual average growth of 9% over the next five years. The industry has already registered an annual growth of about 12% over the past five years. The industry is therefore projected to grow from US$56.1 billion recorded in 2015 to US$88.2 billion in 2020 basing on constant 2010USA dollar exchange rates The Nigerian government has increases the budgetary allocation on infrastructural development so as to address the deficit in the country. An allocation of close to US$ 5 billion in
The industry has already registered an annual growth of about 12% over the past five years. The industry is therefore projected to grow from US$56.1 billion recorded in 2015 to US$88.2 billion in 2020 basing on constant 2010USA dollar exchange rates
the 2016 budget will be used in improving Nigeria's road, rail, airport and other related infrastructural projects. Additionally, the government intends to set a fund of US$25 billion to steer infrastructural improvement by 2020. With this expansion, the construction industry is set to benefit to a bigger percentage. In particular, the infrastructural construction market is set to expand exponentially due to the government's plan of expansion and modernization of the country's rail network to boost trade activity and give a boost to the country's economic development. The government is drafting new bills to encourage private investment in the rail infrastructure. In an agreement signed in 2015, Benin, Nigeria and Bollore Group signed a partnership agreement to upgrade the 438km Cotonou-Parakou railway line and to construct the 574km line to connect Niamey with Ouagadogou. Infrastructure construction enjoys a lion's share in the Nigerian construction industry with a proportion of nearly 30% of its total value in 2015. Timetric expects this trend to remain and record an improvement of 19% annually for the next five years.
MARCH 2016
FOR SAFER
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Incorporating OIL AND GAS REPORT
Engr. Dr. Isa U. Emoabino, Chairman, Nigerian Institution of Highway Engineers is forging ahead to position the practice to ensure safer Highways - led member of the body to AG-Dangote Construction
SMART CITIES A global initiative to encourage world’s cities to became “Smart” has been hailed by built environment professionals, and are united on the need for Nigeria to start focusing on buildin g smart cities Nigeria’s No. 1 Development Professional Journal
Take the lead in c-business Babatunde Fashola, Minister of Power, Works and Housing
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CEDAND PROPERTY OIL GAS REPORT
Chinese property
FOR WHOM THE BUBBLE BLOWS House prices are soaring in big cities, but oversupply plagues much of the country
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HANGHAI, China's financial centre, does not make it easy on outsiders wishing to buy homes. Non-residents who are single are banned from buying property. The married are welcome but only so long as they have paid local taxes for two years and make nearly a third of the purchase in cash. Shenyang, China's biggest northern city, is far more welcoming. Anyone can buy a home there. All to little effect: housing prices in Shanghai, five times more expensive than those in Shenyang, have risen by 20% over the past year; those in the northern city have edged down. This bifurcation is a worry for the government, which wants to spur growth without inflating bubbles. A divergence in housing prices between wealthy cities and the hinterland is a familiar problem in other countries-just look at London and Lincolnshire, say, or New York and Nebraska. But the divisions are starker in China. In its most prosperous cities, already giddy prices continue to shoot up, while unsold flats pile up in markets where valuations were low to begin with. Moreover, construction has long been 22 | www.cedmagazineng.com March 2016
one of the economy's main engines, accounting for as much as a quarter of GDP growth until recently. This makes it especially important that the government get the balance right. Doing so is proving hard. Over the past half-year, the government has unveiled a series of measures to support the housing market that specifically exclude China's five hottest markets (Beijing, Guangzhou, Sanya, Shanghai and Shenzhen). People buying homes need only make a 20% down-payment to obtain a mortgage, except in the five conurbations, where they must put down 30%. By the same token, in most of the country transaction taxes have been cut by as much as two-thirds for people buying second homes; in the five outliers they have been left unchanged. In Shenzhen, a southern tech hub that is the frothiest market, with prices up by 53% in the past year alone, local officials have vowed to crack down on speculators and expand the supply of affordable housing. The results of this two-tier system have been meagre so far. The frenzy in the biggest cities stems from the central
CED PROPERTY
bank's steady loosening of monetary policy over the past 18 months. Although war ranted from an economic perspective, it was inevitable that low interest rates would drive asset prices higher. Initially, much of the credit pumped out by banks ended up in the stockmarket, but following its crash last summer, proper ty beckoned as one of the few decent investment options in China (capital controls, which have been further tightened recently, make it hard for Chinese savers to invest their money abroad). For speculators looking at property, the excess supply in smaller cities was all too evident, so they turned instead to the megalopolises. Du Jinsong of Credit Suisse describes it as a form of groupthink. "Everybody-investors, developers, policymakers and bankersthinks that first-tier cities are safe," he says. Even as the government tries to restrain the excesses, however, it does not want to snuff out the rally in the big cities altogether, for they tend to influence sentiment elsewhere. There are signs that this is beginning to happen. Housing prices started rising month on month in the biggest cities a year ago. In midsized cities (in China, those with populations of 5m-10m), prices have been rising for the past four months. In smaller cities (mere hamlets of 1m-5m), gains have been evident only for the past two months (see chart). If this upturn lasts, some investors reckon it will spur construction. Commodities used to build apartment blocks, such as iron (girders) and copper (wires), have recovered slightly from their recent swoon, partly in the hope that China's property market is also stirring (see article). Indeed, a series Continued on page 27 ?
of mini-cycles in the Chinese housing sector over the past decade followed this sort of pattern: rising housing sales led to new building starts, which in turn pushed commodity prices higher. Figures from the China Index Academy, a data provider, show that the stock of unsold homes has decreased recently, from nearly 30 months' worth of sales early last year to 15 now. "A housing market with rising volume and prices clearly does not support the view that, on a m a c r o l e ve l , C h i n a ' s housing market is oversupplied," notes Liang Hong of China International Capital Corp, an investment bank. But there is a further vast increment of supply on the verge of coming to market, because developers slowed the pace of construction in recent years and in some
cases halted it altogether. There were 4.7 billion square metres of housing under construction but not yet available for sale at the end of last year, up by 25% from the end of 2011; 452 million square metres of housing we r e o n s a l e, nearly three times as much as at the end of 2011. Some provinces and cities are drafting plans to convert unsold homes into subsidised housing for poorer residents. Xi Jinping, China's president, has said that reducing property inventory is a "battle of annihilation" that must be won to revitalise the economy. Revived demand for new construction, in short, is a long way off. The exception is sure to be China's biggest cities, where there clearly is an imbalance between supply and demand. Shenzhen and Shanghai, in particular, are popular with the young and the
highly educated, just the kinds of people that push up housing prices. They are two of China's best-run cities, offering good transport links, good jobs and, by Chinese standards, good air. Unsold housing inventories cover just about five months of demand at the current pace of sales, indicating that more construction is needed. INTERACTIVE CHART: China's housing affordability, city by city Even with these strong fundamentals, it is hard to justify a 50% surge in housing prices over the past year. Regulators suspect that there has been some foul play. This week they said they would target online lenders that have made loans to homebuyers to cover their down-payments; these loans have, in theory, allowed speculators to buy homes entirely with borrowed cash, in contravention of the minimum downpayment requirements. But reining in animal spirits is a hard task. At the Baoshan Property Trading Centre, where people buying homes in a district of northern Shanghai must go to register their purchases, crowds have swelled to such a size that the local government has deployed police to keep the peace. On one recent day a phalanx of security officers in white helmets stood guard alongside barricades as people lined up to submit their documentation. One of those queuing, Wang Jie, bought a new apartment for 2m yuan ($307,000) in October, and has watched its value soar by another 1m since then. "No one seems to buy when prices are falling," he chuckled. "But everyone does when they start rising." Culled from The Economist
Keep yourself abreast of development in the built environment 4 | CED Magazine June 2014
Century 21
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HIGHWAY ENGINEERS REPORT
A STRONG PARTNERSHIP Highway engineers partner AG-Dangote on concrete road
Eng. Dr. Isa Usman Emoabino, (middle) with the Chief Executive AG-Dangote, Ashif Juma
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oncrete roads have been identified as a dependable option to solve Nigeria's infrastructure deficit, especially roads. The Managing Director of AGDangote Construction Company Ltd., Ashif Juma who spoke during the visit of the Executive of Nigerian Institution of Highway Engineers, insisted that concrete roads, apart from lasting longer than asphalt roads, cost about 23 percent less compared with asphalt roads. Juma, a Brazilian and an expert in road construction spoke after an assessment tour of a 23-kilometre concrete road constructed by the Dangote Group of Companies in partnership with the AG-Dangote Construction Company Ltd. It was constructed mainly with Cement. The road was constructed by the two companies for their host communities as part of their Corporate Social Responsibilities (CSR). Even though he did not disclose the total amount the new road cost, he affirmed, "Concrete roads cost almost $600,000? to $800,000 per kilometre 26 | www.cedmagazineng.com March 2016
while asphalt roads cost between almost $800,000 to $1million per kilometre. But the important thing is that today, the concrete is less expensive, 23 percent than the asphalt." His words, "I am almost two years in Nigeria, I think the option for concrete
Engr. (Dr.) Isa Usman Emoabino, Chairman, NIHE
roads would be the solution to solve the infrastructure in Nigeria. In our study, what we found out is that concrete is less expensive than asphalt, almost 23 percent. And also, we have time frame for the project, we build concrete roads in less time." The executive team of the Nigerian Institution of Highway Engineers who were astonished as to the durability of the road, lauded the Management of AG Dangote for the use of cement to construct 23 kilometer road from Itori to Ibeshe in Ogun State, offering to partner with the company to better enhance its operations. Commenting on the use of concrete road for the country, the chairman of the institution who led the delegation for the industrial visits, Eng. Dr. Isa Usman Emoabino, said: "Definitely, this will not be a new thing for Nigeria. AG Dangote is veering out into another area that is not very common in Nigeria and if they work together with professionals like us, we will make sure that we are able to get the best out of that. That is our main reason for coming here, we tagged our visit to the site and to get first hand information on the project, to be industrial visits, and all through the things we have seen, we try to give free consultancy, in order to ensure that whatever we have seen can be made better." The Chief Executive of AGDangote, Ashif Juma thanked the professional engineers for coming and, most importantly for offering to partner with the company. He said the 23-kilometer concrete road is a corporate social responsibility effort of the company, to show that concrete roads are better in all ramifications than the asphalt roads. The Chairman of Dangote Cement, Aliko Dangote, recently reiterated his plea to the Federal Government to consider the use of concrete roads in the country. He urged the Federal Government to embrace the option of using concrete for roads in the country. Aside from being very cheap, he said concrete roads are more durable and that its maintenance cost is near zero.
A
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OIL I
PRICE MOVE Nigeria, Saudi Arabia in move to ‘stabilise’ oil market
n a move to save the economy from collapse and shore up earnings from crude export, President Muhammadu Buhari is on a twonation trip to Saudi Arabia and Qatar. His mission is to push for a rise in the price of oil at the international market, President Muhammadu Buhari and his Saudi Arabian counterpart, King Salman Bin Abdul-Aziz in Riyadh, have backed efforts to stabilise the global oil market. The agreement was reached after the two leaders held bilateral talks during which they had extensive discussions on regional and global issues. According to a statement signed by the President’s Senior Special Assistant on Media and Publicity, Mallam Garba Shehu, Buhari and his host accepted the fact that their countries’ economies were tied to oil and that wellbeing of both
countries will be in jeopardy with instability in the world oil market. But, Buhari made no commitment to a production freeze in the talk that was held in Riyadh, the Saudi capital. “President Buhari and King Salman committed themselves to doing all that is possible to stabilise the market and rebound the oil price,” Shehu said in the statement. Buhari, who arrived in Riyadh Monday night, is in the oil-rich country a week after Saudi Arabia, Russia, Venezuela and Qatar agreed at talks in Doha to freeze production at January levels in a bid to stem the free fall in oil prices. The agreement is conditional on other major producers joining in, as oil heavyweights seek to ensure that others do not take advantage of output limits to win market share. The statement after the talks made no mention of Nigeria joining the freeze but analysts say the OPEC member is likely to eventually support the move. A report in the AFP said the official Saudi Press Agency (SPA) also reported the talks between Saudi’s Deputy Oil Minister, Prince Abdulaziz bin Salman and Minister of State for Petroleum, Dr. Emmanuel Ibe Kachikwu. The talks, the report said, centred on “the best way for (market) stability” and “the cooperation of producing countries inside and outside OPEC (Organisation of Petroleum Exporting Countries)”.
THE OIL GAME Russia has room to play Saudi oil game with EU gas, VEB says
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ussia has the capacity to target volumes over prices in its naturalgas sales, replicating Saudi Arabia's oil strategy, according to state-owned Vnesheconombank's chief economist. The Saudis compete with other crude suppliers by boosting oil production and cutting prices, Andrey Klepach of VEB, as the state bank is known, said Friday. "We could play the same role in gas, as we have the capacity for boosting gas exports and production," he said in the Siberian city of Krasnoyarsk. Struggling with its longest recession in two decades amid a slump in oil prices, Russia is testing worst-case scenarios as it develops long-term strategies for energy, its main moneymaking industry. Gas supplies to Europe may be priced close to the lows seen in 2005 for the next decade. according to the Energy Ministry's "stress" scenario. Russia increased its dominance in Europe's gas market last year, where it met 31% of demand as crude's plunge made oil-linked prices more attractive. While the battle for customers is expected to intensify on rising LNG supplies, including from the U.S., Gazprom said earlier this month it saw no need to change policy and start a "price war." Facing limited demand in Russia and other post-Soviet states, Gazprom says it has capacity to produce as much as 617 Bcm of gas a year, which is 47% higher than its output last year. The company forecasts its average price in Europe may drop more than 30% this year to $169 per 1,000 cubic meters (about $4.7 per million British thermal units) if oil remains at about $35/bbl.
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OIL AND GAS REPORT
OIL AND GAS REPORT
meeting with Abdulaziz, the SPA reported. Oil prices nudged higher yesterday as the two OPEC members met. United States (U.S.0 benchmark West Texas Intermediate crude for delivery in April was up one cent at $33.40 a barrel. Brent North Sea crude for April rose 18 cents to $34.87 compared with Monday’s close.
Leaders of Nigeria and the Kingdom of Saudi Arabia Saudi Arabia and its Gulf allies in the oil cartel had been refusing to cut production, leading to a supply glut that has seen prices fall by 70 per cent since mid-2014. Poorer OPEC members, including Nigeria, have been hard hit by the price drop but even the wealthy Gulf states have been forced to adopt austerity measures to cope with falling oil revenues. “I wouldn’t be surprised to see them voice their support to the freeze agreed in Doha,” Abhishek Deshpande, lead oil market analyst at Natixis in London, said of Nigeria. He said that unless Iraq and Iran also commit to limit production such talks “carry very little weight”. The two countries (Iraq and Iran) are OPEC’s second-and third-largest producers. Iran, returning to world markets as sanctions are lifted under its nuclear deal, has insisted on boosting production to pre-sanctions levels. “Some neighbouring countries have increased their production over the years to 10 million barrels per day and export this amount, then say let’s all freeze our oil production,” Iranian Oil Minister, Bijan Zanganeh said yesterday. “They freeze production at 10 million bpd and we freeze at one million bpd. This is a very funny joke,” Zanganeh said. 24
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Saxo Bank analyst Christopher Dembik told AFP that Nigeria’s position is “a bit ambiguous,” supporting the mooted freeze but at the same time wanting to increase its production to respond to domestic market needs. “In the longer term, there is no reason why the country (Nigeria) won’t align itself with the position of Saudi Arabia and Russia,” Dembik said. Nigeria and Saudi Arabia would also discuss their position towards Iran and Iraq, he added. “Nigeria could have a crucial role in this respect because of its measured position” that Iran and Iraq should elevate their production before envisaging freezes, Dembik said. He went on: “It is probable, then, that Nigeria, meanwhile establishes a bridge for negotiations, notably between Riyadh and Tehran.” According to OPEC’s Monthly Oil Market Report, Iraq produces about 4.4 million barrels a day, followed by Iran at more than 2.9 million. Saudi Arabia’s output is close to 10.1 million barrels a day, according to last month’s (January) data. Kachikwu, who doubles as the Group Managing Director (GMD) of the N i g e r i a n N a t i o n a l Pe t r o l e u m Corporation (NNPC), also discussed joint oil and gas investments during his
Boost for anti-terror war Besides the discussions on the dramatic fall in oil prices, Buhari and his host also agreed that terrorism had become a threat to world peace and that a concerted effort would be required to tame the menace. President Buhari, who was reported to be making his first pronouncement on the invitation to join the coalition of Islamic states against terror being spearheaded by the Saudis, congratulated the Kingdom on its formation. The statement reads: “Even if we are not a part of it, we support you. I must thank the Kingdom of Saudi Arabia for the recent creation of a coalition to address the menace of international terrorism. “Nigeria will support your efforts in keeping peace and stopping the spread of terror in your region. This is in consonance with our own commitment and on-going efforts in seeking to stamp out Boko Haram terrorists from the West African sub-region and Lake Chad Basin Commission (LCBC).” On global terror generally, President Buhari was quoted as saying: “International terrorism made a statement by attacking one of the advanced countries by carrying out an attack on Paris in which 130 were killed. Now we have to come together to find a common solution to the problem of terrorism.” He thanked the Saudi government for not relenting in its support to Nigeria in the fight against terrorism. Alluding to the menace that Libya has turned into, President Buhari regretted that the late Libyan leader, Muammar Ghaddafi, recruited, trained and armed
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Russia Oil
"Russia will have to struggle for its market share one way or another," said Andrey Polischuk, an oil and gas analyst at Raiffeisenbank AO in Moscow. Gazprom is gaining market muscle due to low oil now but may need to change its marketing policy to keep the price in line with competitors when crude rebounds, he said.
OIL STABILITY citizens of many states in the Sahel region. “With his fall, these mercenaries have returned to their countries, doing nothing but to shoot and kill,” Buhari noted. He cited Burkina Faso and Mali as the main victims but expressed happiness that the countries around Lake Chad have tightened their belts to overcome Boko Haram threat. “Luckily, we have cultivated our neighbours. We are now working together against Boko Haram, otherwise the problem would have become worse,” Buhari said. According to him, King Salman hoped that the Libyan factions will soon see reason to reunite and restore peace to their country so as to save the world from further terrorism spin-offs from that country.
The exporter won't cut prices as deeply as the Saudis have let oil fall, and will probably stick to greater reliance on spot prices or easing take-or-pay obligations for clients, like it did about five years ago, according to Polischuk. Pipeline gas from Europe's largest suppliers, Norway and Russia, will remain competitive in the region due to
The leaders also focused on bilateral trade and agreed to give fresh impetus to the joint commission previously established to boost commercial and other activities to further cement
lower costs of bringing it to the market, Tor Martin Anfinnsen, senior V.P. of marketing and trading at Statoil ASA, said this month. "Where the prices are today, we are not dramatically far away from the marginal cost of U.S. LNG to Europe." Gazprom spends about $2 per million British thermal units to lift the fuel in Siberia and deliver it to Western Europe, and it also pays 30% of the contract price in export duties to Russia's budg et, Alexander Kornilov, an energy analyst at Aton LLC in Moscow, said by phone. U.S. LNG suppliers need as much as $6.9 per million British thermal units to buy gas on the market, cool the fuel to its liquid form, deliver it to Europe and re-gasify, James Henderson, an oil and gas industry analyst at the Oxford Institute for Energy Studies, said by email Friday. "However, producers would be prepared to sell down to the cash costexcluding liquefaction-which is about $3.4 now.”
existing relationship. Strengthening reIationship I n h i s r e m a r k s, K i n g S a l m a n commended the progress made by the Federal Government in combating terrorism, promising to give further support and assistance. He welcomed Nigeria’s support for the new anti-terrorism coalition and implored President Buhari to consider its full membership. King Salman pledged his full support and cooperation to Nigeria under its present leadership and directed all agencies of his government to follow up on the discussions. His words: “I now instruct my team to go and sit down with your relevant agencies to push forward cooperation between our states.” According to Buhari’s travel schedule, he is billed to lead the Nigerian team to Qatar for more talks on oil www.cedmagazineng.com Marc 2016 | 25