Swaziland Overview

Published by Swazi Review of Commerce & Industry (Pty) Ltd

Construction

Swaziland Foreign Trade and Investment
Mbadlane Pedestrian Bridge © Inyatsi Construction


Projects amounting to many millions of Emalangeni formed a central thread running through Finance Minister Martin Dlamini’s Budget Speech for the 2014/15 fiscal year. Some he disclosed when announcing his allocations to the various government Ministries – almost all of which had construction-related activities earmarked for the coming 12 months – others were singled out for individual mention.

The latter category included a pair of in-progress projects aimed at creating a knowledge-based economy and a more attractive investor-environment, respectively. Of these, the first referred to the construction of the ‘twin’ Biotechnology and Innovation Parks: Minister Dlamini said when allocating E146-million that the basic infrastructure of these facilities - access roads, electricity, water and telephone networks – should thereby be on course for completion in time for the next phase of construction to commence in 2015. He reiterated government’s commitment to the completion and successful commissioning of these cutting-edge seats of innovation as they will provide the necessary base upon which Swaziland can build a knowledge-based economy.

The other in-progress project to which the Finance Minster referred is that to ensure affordable factory space for attracting would-be investors. He told Parliament and the nation that the Swaziland Investment Promotion Authority had commenced the construction of two factory shells at Matsapha – an undertaking which had been set in motion during the preceding fiscal year – and that he was allocating E28-million for the expansion of three existing factory shells at Matsapha, Matsanjeni and Nhlangano, respectively.

Minister Dlamini went on to say that government recognises shelter as one of the basic needs of people and without which the kingdom cannot boast a vibrant and strong society. He said that Swaziland currently suffers from a housing deficit, and that to address this challenge government has partnered with the Swaziland National Housing Board to construct low-cost homes at an estimated cost of E600-million. This money will be borrowed from the Public Service Pensions Fund and the Swaziland National Provident Fund under government’s guarantee. The three-year construction period is foreseen to generate approximately 14 300 jobs and during that time serve as a catalyst for significant and sustained growth in the economy.

Millennium Projects
Having facilitated the construction of King Mswati III International Airport (KM III) at Sikhuphe, the Ministry of Economic Planning and Development through its Millennium Projects Management Unit (MPMU) is now spearheading yet another landmark – an International Convention Centre (ICC) with adjacent luxury hotel in the country’s fastest-growing locale, Ezulwini. And while the authorities have not yet disclosed a budget for the double-headed initiative, industry insiders estimate a price-tag of at least E1-billion.

The ICC will reportedly comprise an exhibition hall-cum-trade centre, a 3 500-seat banquet hall, secure conference chambers for as many as 53 heads of state, a 1 500-seat theatre, offices and a restaurant. The six-storey hotel is intended to be of five-star quality, include royal and presidential suites and be augmented by meeting rooms and offices, a restaurant and café plus a spa/fitness centre with swimming pool. Each building will include ample parking facilities and the complex, which will occupy a total area of 18 ha, will be interspersed with open, green areas.

This review period began with local news media quoting a senior official in the MPMU as saying that project managers had been appointed, a pre-feasibility study and business plan were in progress, detailed designs for the ICC and conceptual designs for the hotel were complete, land had been secured and the site survey and environmental impact assessment were at such an advanced stage that the three-year construction schedule was foreseen to commence in mid-2014. The Minister of Finance, Martin Dlamini, subsequently allocated E300-million towards the project for the 2014/15 period.

This led to government instituting a tender process for bulk-earthworks site-preparation: in mid-June the Minister of Economic Planning and Development, Prince Hlangusemphi, disclosed that the tender had been awarded to local company and major role player in the construction of KM III, Inyatsi Construction (www.inyatsi.net). Its tender was said to be about E80-million. This preliminary work on the ICC/Luxury Hotel was scheduled to be completed by September, after which, said the Minister, “we will call for Expressions of Interest in compliance with the Procurement Act of 2011, inviting companies to tender for the next stage of the project”. The latter, according to MPMU Acting Director, Patrick Mnisi, will be the setting of deep foundations – ‘piling’ – in accordance with the expert advice already received. Construction of the superstructure will follow.

The CEO of the Ezulwini Municipal Council, V Matsebula, told reporters that offering a world-class, twin-venue such as this would not just enhance the area’s tourism status, but would also further promote Swaziland as a bespoke business and leisure destination.

KM III

In response to the suggestion from certain quarters that government should be building the ICC/Luxury Hotel in the vicinity of Swaziland’s new airport at Sikhuphe in the country’s northeast, the official answer from a purely construction-related point of view was that it would escalate the overall cost by many millions of Emalangeni. A substantial length of tarred highway would have to be built - as opposed to availing Ezulwini’s already established road network – exacerbated by the daily ferrying of manpower, plant, machinery and building materials.

As regards finishing touches to the airport during 2014/15, Finance Minister Dlamini allocated E119-million for the construction of a VVIP Royal Terminal and dedicated hangar, along with the installation of air traffic systems. He said that he would in due course allocate funds to the rezoning of Sikhuphe as a ‘Controlled Urban Area’: this was in line with the declaration made by HM King Mswati III during his official opening of the airport that he wished to see a town established to both support the new facility and bring further development to the surrounding communities. It has thus been decided that urban structures will be constructed beyond a radius of about five km from the airport: a team comprising community members and town planning experts has reportedly identified the most suitable area to site the development. Government urged domestic and international investors to avail themselves of what is being called an opportunity with highly lucrative potential.

In October, Swaziland National Housing Board (SNHB) CEO, Mduduzi Dlamini, issued a statement calling for companies registered with the new Construction Industry Council (see below) to tender for a full range of construction projects relating to residential township services in the vicinity of KM III. The document listed these as ranging from the construction of an airport staff housing estate with roads and storm-water drainage to the installation of wet services, electrical reticulation and the installation and commissioning of pumps and other mechanical equipment. A compulsory pre-tender conference with site inspection for all would-be applicants was subsequently held at the end of the month.

MORE CAPITAL PROJECTS

The above-mentioned airport roads formed part of a 2014/15 Roads Construction and Rehabilitation Agenda to which the Finance Minister allocated E605-million. In his introductory remarks, Minister Dlamini pointed out that the World Economic Forum had ranked Swaziland’s road network among the Top 50 worldwide, thereby evincing government’s commitment. He said that in 2013/14 the paved road network was extended by 64 km year-on-year to 1 345 km, and that the Feeder Roads Programme (FRP) had attained a network of maintained rural roads totalling 3 540 km. The FRP received E15-million for 2014/15, during which period the other projects were listed as:

  • Manzana – Dvokolwako road (additional E33-million)
  • Nhlangano – Sicunusa road (co-financed with BADEA and OFID)
  • Bulembu – Pigg’s Peak road upgrade
  • Kalanga – Big Bend road design
  • Mbabane – Manzini Highway reseal
  • Pilot programme to upgrade rural roads to ‘all-weather’ standard

Agriculture

  • E20-million to extend the Lower Usuthu Smallholder Irrigation Project canal as far as Nsoko, where a private concern is constructing Swaziland’s fourth sugar mill
  • E75-million for rehabilitation of the canal at Malkerns
  • E10-million for the construction of three more medium-size earth-dams in the Lowveld (two were built there during 2013/14)

Education

  • E22-million for the rehabilitation of storm-damaged schools countrywide
  • E18-million for the construction of teachers’ houses in selected primary and secondary schools countrywide
  • E6-million for the construction of new classrooms to support the rolling out of Free Primary Education to its final phase in 2015
  • E16-million for the completion of facilities and infrastructure at the High School for the Deaf
  • E10-million for the rehabilitation of UNISWA’s Kwaluseni Campus and the William Pitcher College

Revenue Collection

  • E22-million for the construction and supervision of border-post entry/exit cargo-inspection areas plus offices, parking areas and surveillance

Manufacturing & Commerce

  • E28-million for the construction of two new factory shells at Matsapha and the expansion of three existing factory shells at Matsapha, Matsanjeni and Nhlangano, respectively, all under the auspices of SIPA
  • E15-million for Phase II of infrastructure development expansion at Matsapha
  • E146-million for bringing to completion by end-2014 the construction of the basic infrastructure at both the Biotechnology Park and the Innovation Park

Water & Sanitation

  • E30-million for the construction of 800 new borehole-based water-points in rural areas (543 were constructed during 2013/14)
  • E77-million to bring to completion by end-2014 the construction of the Nhlangano Water Supply and Sewerage Treatment Plant
  • E77-million for the construction of a new sewerage treatment plant to serve Matsapha

Housing & Ancillary

  • E600-million for a three-year project in partnership with the Swaziland National Housing Board whereby low-cost houses will be built at selected locations around the country and which will generate about
    14 300 new jobs
  • E5.9-million for the construction of a 20-house retirement village with supporting facilities for civil servants
  • E50-million for the replacement of army barracks, plus E4-million for the construction of semi-permanent structures
  • E15-million for the construction of a police station at Buhleni

In September a Ministry of Justice and Constitutional Affairs spokesperson was quoted in the local news media as saying that construction of the E55-million, five-house, exclusive judges’ complex in Mbabane’s Dalriach suburb was complete. The gated-and-guarded cluster of four-bedroom dwellings, each with a perimeter wall for privacy, was built by government in a project that began in 2010.

NEW WATCHDOG

Mid-June 2014 saw the Minister of Public Works and Transport, Lindiwe Dlamini, launch Swaziland’s first Construction Industry Council (CIC) to address pertinent issues and regulate the industry. The nine-member Council includes a legal advisor, as listed in its mandate is the exercising of disciplinary control measures over companies in the construction industry. CIC duties cover regulation through policy implementation, establishment of ethical standards, practices and procedures, and ensuring that appropriate research on any construction-related matter is conducted: the latter includes research on appropriate construction material and reviewing the processes involved in awarding tenders.

Minister Dlamini declared that the Council will be of great importance, especially in promoting professionalism through the training of people within the industry. Citing government’s theme of ‘Development Unusual’, she said that her Ministry considers the construction sector to be particularly relevant in advancing development in a real and practical sense, especially as the nation is witnessing various large-scale construction projects in which Swazi companies are expected to participate. She urged local firms to prepare for meaningful roles in these current and upcoming projects, and similarly to be ready to operate within the codes of the CIC.

Present at the launch were organizations and stakeholders including, among others, the Swaziland Association of Indigenous Construction, the Swaziland Association of Architects, Engineers and Surveyors, the Swaziland Contractors Association, Construction Materials Manufacturers and Suppliers and relevant government Ministries. Speaking on behalf of the Board, its Chairman, Dan Dlamini, lauded the Minister for playing an important role in appointing the members of the CIC and having confidence in them: he gave an assurance that they will execute their duties diligently and transparently.

The CIC’s promulgation comes just a year after the region-specific World Bank Ease of Doing Business Report on the Southern African Development Community found that of the latter grouping’s 15 constituent countries, Swaziland is second only to South Africa in terms of having the ‘Best-Regulated Construction Sector’. According to the World Bank, those countries with the highest rankings with regard to this indicator are placed at a competitive advantage when it comes to attracting new investments.

The report also said that Swaziland’s construction sector processes were suitably investor-welcoming: its authors found that in Swaziland it takes about 95 days in total to complete all legal procedures that have to be followed in construction: this includes the time taken in submitting all relevant documents and obtaining all necessary clearances, licences, permits and certificates. It also includes the time taken in completing all required notifications and receiving all necessary inspections, obtaining utility connections for water, sewerage and a fixed telephone line.

PERFORMANCE 2013/14

The Central Bank of Swaziland stated in its Annual Report on the period in review that the construction sector expanded year on year, mainly driven by growth in real capital expenditure and an improvement in the implementation rate of government capital projects during the 2013/14 fiscal year. Government’s capital programme focussed on road construction and continued implementation of Millennium Development Projects. The latter included the Mbhadlane-to-Sikhuphe link road, the Siphofaneni-to-St Phillips road and the bringing to completion of KM III International Airport, most of which the CBS referred to as still-ongoing.

Apart from public sector initiatives, the private sector continued to expand with regard to the construction of buildings for residential and commercial purposes: the latter were said to comprise mainly office spaces and shopping centres.

According to the CBS, different indicators for construction activity depicted mixed trends:

  • The total number of building plans completed was somewhat stagnant, recording 147 units in 2013/14 compared to the previous year’s 149. The slight drop in number was ascribed to the fact that most of the big private sector construction activity was still ongoing at the close of the review period – about 90 percent complete - and thus not reflected in total building plans completed.
  • This factor also translated into a huge drop in the value of building plans completed during 2013/14: it registered a decline from E765.2-million in 2012/13 to E144.2-million in the year in review.
  • Quarried stone production slowed by 5.1 percent year-on-year in the wake of a remarkable 49.5 percent jump in 2012/13.
  • Conversely, the value of real imports of construction material – predominantly cement – surged by 10.4 percent in 2013/14 in comparison to the previous reporting period.

The CBS deduced that prospects for the construction sector remain positive in the medium-term: the leading indicator for private sector construction activity – total building plans approved – increased by 10.3 percent year-on-year to 728, while their value increased to E656.3-million from E438-million in 2012. The number of plans approved was mainly driven by residential buildings, while commercial buildings dominated in terms of pushing up the value.

Huge growth is expected from the public sector. The 2014/15 fiscal year budget allocation depicted a 44 percent increase in envisaged capital expenditure: approximately 81 percent of the total capital expenditure focussed on completing ongoing projects, while the remainder was said to be a provision for new capital projects.