The warning comes as severe project delays plague Eskom's new power stations, which along with violent strikes, underline the poor state of the civil engineering industry in SA.
The body says in its latest biannual economic and capacity survey of the industry released on Monday, 4 May, that the level of satisfaction among engineering firms plunged from 87% in the first six months of the year to 46% in the second half of 2014.
"This is the weakest level since the 1998-99 financial crisis. There was a notable shift in the opinions expressed by larger firms in this survey," Cesa acting CEO Wally Mayne said.
"In the June 2014 survey, larger firms were unanimous in their views that the outlook for business conditions was satisfactory over the next 12 months, but this changed to just 22% of larger firms," he said.
Cesa said it had "come to a point" where the government also had to make "hard economic decisions" instead of "political decisions" when it came to SA's infrastructure needs.
"Government is going to be spending less on infrastructure in the next three years - that is the reality we are facing," Elsie Snyman, CEO of Industry Insight, which compiled the Cesa survey, said yesterday.
She said that low economic growth in the country, delays in implementing projects and budget cuts meant that projects were being held back.
"The simple reason is that we are running out of money," Snyman said.
She also said that provinces and municipalities were not spending their budgets.
Among the industry's main challenges was that state procurement of infrastructure was based on the best price and broad-based black economic empowerment status, with "little or no regard to functionality or quality", Cesa said.
"This is affecting tender prices, as firms sometimes tender below cost in view of the diminished availability of projects," Mayne said.
"Unrealistic tendering fees remain a concern for members, while the extended time it takes in which to finalise a proposal is affecting profitability in the industry," he said.
A further challenge was to standardise "different procurement procedures" applied by various government departments.
Mayne also said that Cesa members were under pressure from "contractors and corrupt officials, to certify payment for unfinished work".
Unlocking greater private- sector participation was seen as critical to fast-tracking service delivery and also to developing the industry. But with a declining number of jobs for a highly skewed proportion of ageing white engineering professionals, there were also not enough black registered engineers and technical staff showing up in industry statistics.
In this regard, Cesa was particularly riled that the Department of Water and Sanitation had recently imported 34 Cuban engineers to work on public infrastructure projects, while domestic professionals struggled to find jobs.
Source: Business Day
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