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State underspending costs jobs: Cesa

Feb 02 2011 12:49 Sapa

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Johannesburg - The government's budget underspending on infrastructure means a huge loss in potential jobs in the construction sector, Consulting Engineers SA (Cesa) president Zulch Lötter said on Wednesday.

“We have seen in the last financial year substantial unspent budgets,” he said.

He said the government had allocated R846bn to spend over three years on infrastructure in its 2010 budget.

“Very little of this spend seems to have materialised.”

About seven jobs were directly created for every R1m spent in the construction sector each year. Only agriculture and mining create more jobs per million rand spent.

“Government is a major client in the construction sector and therefore has the ability to make a significant impact on employment creation through investment in infrastructure.”

The reported R12bn of unspent budget in the last year by the government, excluding state-owned enterprises, equated to a “loss” of 100 000 jobs, he said.

This "cannot be tolerated" in a country with such high unemployment and below average growth rate, even in Africa.

"We believe the crux of the service delivery [problem] is the shortage of technical leadership in the public sector,” he said.

The number of technical professionals employed in the public sector had dropped significantly. In 1995, there were about 5500 technical professionals servicing 15 million people, as it excluded the homelands.

Now there were an estimated 1800 professionals for a population of around 50 million.

“Leadership capacity is going down in the public sector,” Lötter said.

The jobs not created through this should be seen in light of the government's New Growth Path economic strategy, which aimed to create five million jobs in the next decade.

This included a target to deliver 30 000 engineers a year by 2014.

Lötter called this "a little bit of a challenge".

At the moment, about 2500 engineers graduated annually from universities. If graduate technicians and technologists were included, the annual figure was about 6000.

Only about 40% of first year students eventually graduate.

"If the pass rate could be increased to say 80% by raising the quality and numbers of educators, the number of annual graduates could be upped to say 12 000," Lötter said.

But even if this were to happen, they might not find jobs, as at present graduates battled to find employment.

"... if the infrastructure spend by the public and private sector does not increase adequately, South Africa will be producing a surplus of engineers..."

It would also help if technical positions were created in technical public sector departments.

The Municipal Systems Amendment Bill, announced by Local Government Minister Sicelo Shiceka in May 2010 to redress problems hampering service delivery, had been a "non-event", Lötter said.

The bill was supposed to address deployment and the appointment of inappropriately qualified staff in key positions.

He hoped the bill would be enacted early in 2011.

Construction activity began declining in 2009 and this had continued well into 2010, which had led to job losses in the engineering field and companies operating with around 80% capacity.

It was hoped the National Planning Commission might help, but so far it had been quiet, but was expected to become more visible early this year, he said.

"One would hope that a process of public involvement will be included in their preparations for such a plan because our members may have valuable contributions to make, especially in regard to urbanisation and infrastructure needs."

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