Friday, July 12, 2024

Consultants incentivised to delay projects

A South African project management expert says that the practice of paying consultants a certain percentage of the value of a project is misguided. “That is giving them a blank cheque,” said Tumi Kgomo, adding later this practice gives rise to cost escalations and project delays. “Consultants are paid on an hourly basis.

If you give them a blank cheque, you are telling them that you can work non-stop.” His recommendation is that consultants should be paid a fixed amount, which method of payment would eliminate the incentive to increase costs and delay projects.

Kgomo, who is a former Chief Director (Projects) in the Department of Public Enterprises in the South African government, has been involved in some major projects in his home country. From October 2010 to date, he has been part of a group of experts monitoring the construction of the Medupi Power Station Project, a dry-cooled coal-fired power station that is being built by Eskom in the Limpopo province. At a total capacity of 4800 megawatts, Medupi is eight times the size of Botswana’s ill-fated Morupule B Power.

Between December 2007 and September 2010, Kgomo worked in the 2010 Soccer World Cup operations. His duties included drafting and allocating World Cup budgets; managing and monitoring World Cup expenditure before and during the tournaments; verifying and assessing World Cup operations; setting up operational parameters for the event and sub-events; designing and writing the volunteers manual; and managing the project and its sub projects.

Amplifying Kgomo’s point from a different perspective, Oabona Kgengwenyane, the Group Managing Director of Innolead Consulting, said that poor resourcing of projects results in consultants filling the void and charging exorbitant fees in recompense. Making specific reference to parastatal organisations which typically don’t have project management methodologies, Kgengwenyane said that service providers that these entities engage on projects would be inclined to superimpose their own methodologies.

Ultimately though, what fees consultants charge has to do with the fact that they are providing a scarce skill and only bouncing along to the vagaries of supply-demand forces. Often this leads to brain drain from the public to the private sector. A senior official from the Ministry of Transport and Communications said that in certain instances, training staff in project management comes to naught because some individuals head for greener pastures after completing their training.

“I intend to train some of them but I know they will leave when they complete the training,” he said. In response to this concern, Kgomo suggested training as many staff members as possible to mitigate future shortage. In buttressing this point, Mike Sicilia of Oracle Primavera, said that investing in the training of more and more personnel in project management would ensure that over time, the expert pool fills up and fees go down as such personnel become less and less of specialists.


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