 The Association of South African Quantity Surveyors recently released their annual salary survey results for 2018. Over 100 quantity surveying practices, some of which operate in more than one province, participated in this year’s survey, with the salaries of 506 Quantity Surveyors having been analysed.
Are the salaries of QS's declining, or are they leaving the country? One of the most significant results from this year’s survey is that the number of practising salaried Quantity Surveyors with more than 10 years experience seems to have declined from 28,2% to 21,4%. A knee-jerk reaction could be to attribute this drop in remuneration to the number of experienced Quantity Surveyors leaving the country, but this hypothesis is difficult to prove for a number of reasons. Tracking emigration rate in South Africa is complex without running a monthly headcount, but a report from Pew Research estimated that at least 900,000 people born in South Africa were living abroad in 2017. By the time of the next national census in 2021, this could easily be over one million people based on current rates. The exact number of educated and experienced Quantity Surveyors who have left the country over the past year, however, remains unknown. The Quantity Surveying profession has been challenged by a number of changes in the macro environment over the past two years, and this year’s drop in remuneration doesn’t necessarily signify the beginning of a downward trend. With last year’s annual salary survey, the ASAQS saw a sharp drop in the remuneration of quantity surveyors qualified at university and with more than 10 years experience. That seems to have been corrected in this year's survey. Salary comparisons by province According to the median provincial comparison of Quantity Surveyors with 11 – 20 years experience, Quantity Surveyors in the Western Cape receive the highest remuneration (R971,000 per annum), followed by Gauteng (R868,485 per annum) and Limpopo (R769,374 per annum). The survey was conducted in March and the remuneration packages of the principles, partners, members of close corporations and directors were excluded from the results. The ASAQS also warns that one should be cautious when comparing figures from one year to the next. The survey suggests trends over longer periods of time and if one compares the 2018 percentage to the 22,0% recorded in 2013 then the balance in experience seems to have remained fairly constant. Older salary surveys can be downloaded here. ENDS MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za For more information on ASAQS please visit: Website: www.asaqs.co.za Facebook: The Association of South African Quantity Surveyors
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 “During 2018 we lobbied for the regulated appointment of quantity surveyors to infrastructure projects,” says Larry Feinberg, Executive Director of the Association of South African Quantity Surveyors (ASAQS).
The impact of this was evident in the Mid-term Budget Policy Statement by Finance Minister Mboweni where he included quantity surveyors in the execution unit that will be formed to assist with the problem of poor infrastructure project preparation. In Minister Tito Mboweni’s words: “Too often‚ government spends money on infrastructure when it could be better and more effectively done by the private sector. The Development Bank of Southern Africa‚ the Government Technical Advisory Centre and the Presidential Infrastructure Coordinating Commission will receive R625-million to strengthen project preparation.” “Government will establish an execution unit made up of engineers, quantity surveyors, architects and other professionals to ensure that challenges in the Vaal River System and with the Giyani Water project are resolved. The execution unit will also advise government on new delivery and financing models to provide basic services to communities.” The regulated appointment of a registered Quantity Surveyor is essential for the reduction of irregular and wasteful expenditure. This is turn will help to ensure that public infrastructure spend is applied to the benefit of the greater South African public. “While we advocate for this change, Quantity Surveyors also have to keep an eye on remaining relevant and offering valuable services in a changing world,” says Feinberg. Product changes Self-healing concrete, air-cleaning materials, transparent wood, and graphene are just some of the innovative products that are rapidly moving from being labelled alternative building materials to more mainstream. While South Africa has not yet adopted many of these materials, no construction professional should wait for someone else to be the first to learn how to work with these materials. Process changes Similarly, new techniques in the construction process like additive manufacturing – for example the 3D printing of buildings – also need to be factored into the sustainability and growth strategies of firms and professionals in the South African built environment. All traditional methodologies must be reviewed with a focus on to the relevancy to the future of designing, constructing, and maintaining infrastructure and buildings. “Those that can adapt without being forced to do so will have a distinct advantage over those that wait until proof of concept,” warns Feinberg. Role changes Changes to existing methodologies don’t need to be at the extreme edge of technological innovation. Even experimenting in small ways with readily available processes – like Building Information modelling (BIM) – can give construction professionals an edge. “By rethinking and redefining their traditional roles, professionals in the built environment can help create a secure future for themselves,” says Feinberg. “This security will be built less on the work they’ve already done, and more on how relevant they can remain to their clients’ needs.” A Quantity Surveyor (QS) is a financial expert trained specifically in the complexities of construction sector finance, procurement and contract administration. The QS is responsible for ensuring that a client receives value for their money during the viability stage, the construction phase and the entire lifecycle of the building, road, bridge, dam, etc. This is done by verifying – at various points during the planning and construction phase – that the actual expenditure and project delivery aligns with specified material, approved budgets, and agreed timelines. Feinberg says that Quantity Surveyors would however do well to think of themselves not just as experts in procurement, building contracts and cost control enabled by meticulous measuring and calculations, but also as governance experts and ethics advisors. Quantity Surveyors are ideal business advisors, even if the historical foundation of the profession is “number crunching”. “During 2018 the ASAQS has made solid strides towards enabling QS’s to make additional valuable services available to clients,” says Feinberg. “Courses and standardised documentation on life cycle costing, value management towards savings and operational efficiency, and advice on sustainable building practices, methodologies and materials are just some of the many additions we’ve made to our stable of Continuing Professional Development offering.” ENDS MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za For more information on ASAQS please visit: Website: www.asaqs.co.za Facebook: The Association of South African Quantity Surveyors The International Construction Measurement Standards (ICMS) is a new, high level international standard that aims to provide greater global consistency in classifying, defining, measuring, analysing and presenting construction costs. The Association of South African Quantity Surveyors (ASAQS) is working with a growing group of professional and not-for-profit organisations from around the world to develop and implement these standards for benchmarking, measuring and reporting construction project costs.
ASAQS EduTech Director, Karl Trusler, is representing the ASAQS in the ICMS coalition. He says that a global standard in cost reporting will benefit South African Quantity Surveyors, developers, and other professionals in the built environment in a number of ways. Levelling the playing field for built environment professionals “When there is global consistency in how the construction costs of a project are represented, investors and clients are able to compare apples with apples,” explains Trusler. “Through the introduction of a standardised cost reporting template, the ICMS is succeeding in creating a common language for the global built environment.” “Regardless of where they are based, clients can use the ICMS as a guideline to determine where in the world they should develop their projects to achieve the best returns thanks to the consistency and benchmarking it provides. It has the potential to level the playing field globally,” says Trusler. The way that construction project cost reporting has been presented to clients, developers and investors in the past can vary from country to country and even within countries. Adoption of the ICMS means that construction costs will be presented in the same way whether at a project, regional, state, national or international level. “The stand-out benefit is that real comparisons of construction projects can be made, and these comparisons will guide more informed decision making. An increasing number of local Quantity Surveyors are becoming involved in projects across our borders into the rest of Africa and beyond. To become and remain globally relevant, they should seek to do their reporting in an internationally standardised way. The ICMS speaks to this need,” says Trusler. Encouraging widespread adoption of a globally consistent standard As the ASAQS representative to the coalition, Trusler is tasked with staying informed and connected on global developments related to the ICMS and providing feedback and suggestions from members to the coalition. When asked how widely the ICMS has been adopted in South Africa, Trusler explains that it is still very new and has not yet become the status quo. “Like any initiative in the built environment, there are early adopters, but the majority of South African professionals in the built environment are waiting to see what the uptake will be. While the larger multidisciplinary practices may adopt the ICMS quicker, the majority of smaller practices in South Africa would be more cautious. Basically, all practices make use of some form of a cost reporting system so to become ICMS compliant, they would need to align their reports to the ICMS cost reporting template.” The ASAQS plans to encourage the adoption of the ICMS through education. “When people are informed and grasp the value of a concept, they become motivated, and before long through their own initiatives the concept gains momentum. Across the globe, the ICMS is beginning to gain momentum through the efforts of local organisations. Lobbying at government level is a priority because government adoption will go a long way towards cementing the ICMS as the national standard within countries,” concludes Trusler. ENDS MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za For more information on ASAQS please visit: Website: www.asaqs.co.za Facebook: facebook.com/asaqsza Linkedin: linkedin.com/company/asaqs  There is a growing need among both public and private sector building owners and property developers to gain greater insight into what their buildings will actually cost them over their lifespan. The Association of South African Quantity Surveyors (ASAQS) is set to launch a new document that will guide professionals in the built environment on the importance of calculating the Life Cycle Cost of a building and how to calculate these costs.
“The production of this document is part of the ASAQS mandate to provide value back to our members by equipping them with resources that will enhance their service offering back to their clients,” explains Larry Feinberg, ASAQS Executive Director. Life Cycle Costing (LCC) is the total costs of an asset over its entire operating life, including initial acquisition costs, and subsequent running costs. ASAQS EduTech Director, Karl Trusler, says that traditionally, the most important factor taken into account when considering the development of a project are the initial capital costs. The running costs of a building over the long term, however, far outweigh the initial capital costs, which means that everyone from quantity surveyors and other professionals to building owners and developers should reconsider their approach to the materials and equipment they choose and the design decisions and construction methods they opt for. A long-term approach to property assets “Even though buildings are capable to remaining operational for 100 years and longer, service components and certain finishes and fittings within a building generally have a much shorter life span. Therefore, for the purpose of LCC calculations, a time period of 30 to 40 years for the design life of a building is recommended as there are few advantages in going beyond 40 years.” “The initial capital investment is only the tip of the iceberg when considering the Total Life Cycle Cost of a project. It’s the part we all see, but what we do not always see is the much larger portion of the costs that will be spent on maintaining the building over its lifespan,” says Trusler. “Instead of presenting clients with a cost report indicating the initial cost of erecting a building only, what is needed is a way to show clients what type of costs they are likely to incur to maintain a building over an extended period of time. The new LCC document will equip people with the ‘why’ and ‘how’ to go about doing this.” The document, which will be launched during the gala evening of the 10th South African Council for the Quantity Surveying Professions International Research Conference on 1 October 2018, is the product of years of research and work. The three main contributors of the document are Dr Hoffie Cruywagen of the University of Pretoria's Department of Construction Economics, Dr Deen Letchmiah, Chairperson of the Board of Directors of LDM Consulting and President of the SACQSP, and Danie Hoffman, a Board Member of the ASAQS. “The first half of the document provides background and insights on what LCC is. It offers an academically-researched build-up to the second part of the document, which looks at LCC exercises and practical examples on how to go about providing clients with LCC analysis,” says Trusler. Lifecycle costing to become the norm Internationally, LCC is being seen as a means to promote green and sustainable infrastructure procurement for the public sector, and for good reason. “When you consider the long-term use of public buildings and infrastructure, it makes sense for a complete Life Cycle Cost analysis to be undertaken on proposed developments. This information provides the means to make decisions that will ensure sustainable public sector procurement. In the private sector, developers with a long-term view for their property investments should be interested in these figures for similar reasons. The new LCC document will guide professionals on best practices and the practical application of LCC,” concludes Trusler. The new ASAQS Guide to Life Cycle Costing 2018 document is available at https://www.asaqs.co.za/store/ViewProduct.aspx?ID=12341793 ENDS MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za For more information on ASAQS please visit: Website: www.asaqs.co.za Facebook: facebook.com/asaqsza Linkedin: linkedin.com/company/asaqs  Quantity Surveyors are aiming to play a crucial role in getting “frozen” infrastructure development projects back on track. “Municipal managers and classically trained accountants are currently expected to deliver complex projects,” says Larry Feinberg, Executive Director of the Association of South African Quantity Surveyors (ASAQS). “Not only is this expectation unfair on them without them having received the proper training; it’s also part of the reason why some large infrastructure development projects have been suspended or have ground to a halt.”
According to Feinberg the ASAQS has been in talks with senior government officials and other industry bodies to create solutions that can assist with training and professional support to those charged with delivering these projects. “Training on the use of standards documentation is but one of the areas where Professional Quantity Surveyors can be of assistance,” explains Feinberg. “Deploying Professional Quantity Surveyors to upper echelons in government is one of the mechanisms that can be used to good effect to educate officials on good governance in procurement, bidding and tendering processes, and the complex process of managing the construction process from a cost control point of view.” The “Send Me” call made by President Ramaphosa during his State of the Nation address earlier this year has resonated with many and sparked collaborative action across many economic sectors. Feinberg hopes that this call can be used as a basis for professionals in the built environment to bridge focus areas that traditionally operate in and create solutions that serve the best interest of the public and the fiscus. “Our interactions on several discussion platforms are focused on how to bridge the gap between what Thuma Mina means for the public sector and how our members can assist,” says Feinberg. The ASAQS has consistently promoted the role of a Quantity Surveyors as one that plays a significant part in curbing instances of fraud and wasteful expenditure. “The time for behaviours that – intentionally or unintentionally – resist collaboration is over,” says Feinberg. “It is now time for all of us to share knowledge and expertise, so we can collectively respond to the President’s call.”  IMAGE: Amanda Khoza, News24 The report of irregular expenditure on the on Winnie Madikizela-Mandela Brandfort is concerning, but commonplace. The Association of South African Quantity Surveyors (ASAQS) says this will only change if the right mix of professionals are appointed at the tender phase of infrastructure projects.
The report by News24 states that “the quantity surveyor's report found fruitless expenditure of R593 622 "with regard to the Winnie Mandela House Project".” “The appointment of a Quantity Surveyor to calculate and oversee projects should not be an afterthought when budget allows,” warns Larry Feinberg, Executive Director of the ASAQS. “We strongly recommend that the appointment of a Professional Quantity Surveyor becomes part of the legislated tender process.” A Quantity Surveyor (QS) is best placed to identify deviations from original tenders in terms of both scope and pricing. As such, they act as the client’s watchdog. In the case of public projects, the client is ultimately the taxpayer. One of the key issues in any public project is to ensure that the tender is awarded to the right contractor at the right price. The training undertaken by Quantity Surveyors allows them to manage the financial and legal processes of a project. “Professional QSs are also bound by a code of conduct,” explains Feinberg. “If they are found to have contravened the code, they will lose their licence to practice as a QS.” ENDS MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za For more information on ASAQS please visit: Website: www.asaqs.co.za Facebook: The Association of South African Quantity Surveyors  Obtaining funding for development in African countries can be a monumental task, especially in the property development market. Political instability, foreign currency exchange controls between banks and governments and a lack of strong legal structures in certain regions makes it tough for property developers to get projects off the ground. Even when all the necessary legislative documentation is in place, projects can be delayed for years due to a lack of access to funding.
DuRaan Conradie, member of the Association of Quantity Surveyors of South Africa (ASAQS), says that two of the major hurdles that property developers face are obtaining funding from banks and raising the prerequisite capital deposit – the equity contribution – for their projects. “Banks need security to be confident that they will get a return on the money they loan to a developer. Most banks require an equity contribution on average of 30% from the developers before they will consider granting a loan for the remaining 70%,” says Conradie. Large equity contribution keeps smaller developers out of the market After the global financial crisis, property developers in Africa find it increasingly hard to raise the required equity. While equity partners are often willing to loan developers the amount, they do so at high interest rates. “This dilemma keeps many smaller developers out of the market. Even if the envisioned project or development is financially viable and has a bulletproof tenancy and occupancy program or sales scheme, getting a loan from a bank means that you must prove that you have considered a number of factors and have received the professional input you need to move forward,” says Conradie. Feasibility studies can give banks the reassurance they need to fund projects Feasibility studies by specialised Quantity Surveyors can give property developers in Africa the negotiating power they need to not only obtain equity funding, but to get access to the debt funding from banks or other financial institutions. After a developer approves a feasibility study, the Quantity Surveyor is responsible for making sure that building costs and professional fees don’t go over budgeted allowances (which is a common problem with property and infrastructure projects in Africa) and that tenant installation contracts are in place. Financial institutions require viability studies as part of the loan application; they want to see evidence that the entire capital cost has been carefully considered and calculated. They also want to make sure that the developer is managing his risks where possible by appointing, for example, credible professional teams and building contractors.” “While larger development companies do viability studies themselves, many smaller developers should invest in the services of a professional. The fees related to having this study done on your project is minimal and it can help you secure the funding you need since it is a document that banks trust,” says Conradie. Developers are strongly advised to take advantage of the services of Quantity Surveyors for feasibility studies. “The red tape is there for a reason, but the guidance of a professional can make sure that all your commercial bases are covered, that your cost calculations are transparent, and that banks and donors see the value of partnering with you to bring your dream to life,” concludes Conradie. ENDS MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za For more information on ASAQS please visit: Website: www.asaqs.co.za Facebook: The Association of South African Quantity Surveyors  Like many parts of the world, the South African built environment and construction industry is still in a slump. Economic pressure has led to a number of contractors relooking their pricing strategies to see how they can offer services at a lower price than their competitors. While this is a clever marketing strategy, it may expose clients to certain risks, says Henry van de Wall, member of the Association of Quantity Surveyors of South Africa (ASAQS), and Chairperson of its North West chapter.
“Some contractors may be able to absorb the cost of taking on projects that don’t necessarily yield a profit.” There are many ways that these contractors can lower their rates. A lower price could be offered if they are able to get material discounts from their suppliers, or if they are for example willing to cut their profit margins in certain areas. “While this can make good business sense in the current economic climate, it does open clients to certain risks,” warns Van de Wall. Clients being left with uncompleted buildings and legal costs One of the risks is that a contractor could be offering discounted rates to a number of clients and just scraping by or barely making a profit. If one or a number of his clients then defaults on payments, the contractor’s business may not be able to absorb the financial repercussions and be able to complete the work that he has committed to on other projects. In this case, a client’s building could be left uncompleted or the project could be delayed due to cash flow problems, or even worse – bankruptcy. “While hiring a professional Quantity Surveyor is often seen as something that only commercial clients should invest in, it is becoming more important than ever to obtain professional input regarding a contractor’s prices,” says Van de Wall. “This initial addition to the project costs will assist a great deal in protecting the larger investment.” Besides getting a market related estimate to confirm the tendered prices from a contractor, a Quantity Surveyor can also provide crucial clarity about the quality of materials and the scope of work that the client and contractor have agreed on. Avoiding unnecessary surprises in your Bill of Quantities Even with relatively straightforward building projects, the ASAQS has seen many disputes arising from contractors who are trying to bill for ‘extra work’ on building items that any client would rightfully deem to be included as a compulsory part of a building project. “A Quantity Surveyor can give clients the estimate, Bill of Quantities and professional guidance they need to protect themselves,” says Van de Wall. Quantity Surveyors aren’t only appointed to protect clients. Many contractors are also creating allowances for Quantity Surveying services in their own projects, which is the responsible way to proceed with building projects. Contractors are able to negotiate with Quantity Surveyors regarding fees so that they can still offer competitive rates to clients. The contractors then receive the benefit of being able to offer this professional estimation as a perk to clients, so it’s a win-win for all the parties who are involved in a project. “With this attitude, a Quality Surveyor isn’t seen as a referee, but rather an independent consultant and enabler who can provide the quality checks that both contractors and clients need to rest assured they are getting a valuable, financially suitable and sustainable building,” concludes Van de Wall. ENDS MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za For more information on ASAQS please visit: Website: www.asaqs.co.za Facebook: The Association of South African Quantity Surveyors  The Nelson Mandela Bay municipality recently announced its plans to address its R11.5bn irregular expenditure.
“We are in full support of the appointment of a Quantity Surveyor as head of Demand Management,” says Larry Feinberg, Executive Director of the ASAQS – Association of South African Quantity Surveyors. “The municipality got it spot on in stating its reason for going this route as “ensuring value for money in terms of the procurement process”.” A Quantity Surveyor (QS) is best placed to identify deviations from original tenders in terms of both scope and pricing. As such, they act as the client’s watchdog. In the case of public projects the client is ultimately the taxpayer. One of the key issues in any public project is to ensure that the tender is awarded to the right contractor at the right price. The training undertaken by Quantity Surveyors allows them to manage the financial and legal processes of a project. “Professional QSs are also bound by a code of conduct,” explains Feinberg. “If they are found to have contravened the code, they will lose their licence to practice as a QS.” ENDS MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za For more information on ASAQS please visit: Website: www.asaqs.co.za Facebook: The Association of South African Quantity Surveyors  Reports of construction sector confidence plummeting to 17-year lows should not be the reason for investors and developers to lose complete faith in the industry, according to the Building and Property Economics Committee of the Association of South African Quantity Surveyors (ASAQS).
“Low confidence in the construction sector is cause for concern due to the impact on investment and risk,” says James Hanley, chairman of the Committee. “The built environment is however known for being cyclical, and these cycles last approximately three years.” While sensible business planning and building up reserves in their practices is the standard recommendation during times of high confidence and investment, built environment professionals tend to be at the mercy of the market. What is needed to smooth out the cycles is better governmental planning and longer term infrastructure commitments that enable the sector to respond and build capacity. “If the past is anything to go by, the industry will start to improve soon,” says Hanley. “The construction industry normally lags the general industry by about 6 months, so improving conditions in the general economy tend to influence the cycle accordingly.” It is however unwise for business to only wait for macro-economic and –political factors to turn favaourable rather than doing what it can to ensure future sustainability. The Committee cautions against panic to reports of economic downturn and low investor confidence, and instead advises built environment professionals to make use of any surplus time they might have available to develop and broaden their skills. While it might seem counterproductive to seemingly take time away from business development to strengthen or diversify the professional skill set, the focus should be on the long term sustainability of the professional team. “By strengthening and diversifying their skills sets, built environment professionals will be better equipped to deal with disruptive changes that continue to challenge a variety of sectors,” says Hanley. The Committee also warns agains aggressive fee discounting that adds additional pressure to professionals such as quantity surveyors. This practice not only threatens the livelihood of individuals, but undercuts the reputation of an entire sector as a severe reduction in fees can easily create a perception that is disproportionate to the real value of a service. “Fee discounting is at best a poor business decision, and at worst anti-competitive,” warns Hanley. “Professionals that portray low confidence in their own skills through a willingness to undercut standard industry fees are doing more damage to the sector than macro-environmental factors.” Rather than reduce their fees to secure a sliver of a small pie, built environment professionals should rather increase their capability to showcase the value of their services. “It will serve both professional and sector interests – by increasing the amount of work available to all – if built environment professionals are capable of creating an understanding among clients of the true short term savings and lifecycle value of incorporating professional fees in the budget of any infrastructure development or maintenance project.” ENDS MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za For more information on ASAQS please visit: Website: www.asaqs.co.za Facebook: The Association of South African Quantity Surveyors |
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