With a history dating back more than sixty years, and a presence in South Africa for more than twenty five, UK-based construction consultancy Turner & Townsend (T&T) has become a fixture in the SA landscape with involvement in projects such as the Gautrain and Durban International Airport (artist impression pictured above).

TradeInvestSA’s online editor, Miles Donohoe, spoke to Ian McDonald, managing director of Turner & Townsend’s South African business, about his experience of an overseas company operating in South Africa, and found him reassuringly optimistic about the future.

You opened your first African office in Johannesburg in 1982. How did that come about, and do you still see that as your headquarters for Africa?

We were asked to come over by one of the big coal mining companies in the UK for a six week exercise in 1982, and Tim Wray, our current chairman, came over and ended up staying for 21 years. Yes, Johannesburg is certainly still the headquarters for our African operations. We have five offices in South Africa and a further nine in Southern Africa and all of these use our Johannesburg office for support services.

You have a number of offices in Southern Africa including Botswana, Malawi, Mozambique, Zambia and Zimbabwe. Do you have plans to operate further north into Africa?

We do work on projects elsewhere in Africa but we don’t have regional offices. We have projects in Tanzania, the DRC, Zambia and Senegal. We also work all up the West Coast as well into Nigeria and the Ivory Coast, but we always operate as members of a team. We always keep the idea of opening more regional offices under review, but there are a few challenges logistically.

Also, from a linguistic point of view, many are francophone countries which presents other difficulties. We do continually review it, but often our operations in North Africa are undertaken by our European offices as logistically it is easier for them to handle the project.

How have you found doing business in South Africa compared with your other African offices?

We find doing business in South Africa is really quite good. We support the principles of BEE and we’ve found it really easy to do business here. If you check our client base, we have a large number of blue chip clients. Also, Zimbabwe - obviously there are economic difficulties there - but it has been a fantastic office; Botswana has also done very well. Mozambique is certainly different – it has a different legal process. We’ve found it very easy with the old commonwealth countries. If the background is English then it’s pretty easy, as it all works much the same way.

What percentage of T&T’s business is done in Africa and South Africa?

For the year to April 2007, Turner & Townsend had a net turnover of 150m pounds. The UK is still clearly our biggest market and generated 98m pounds. But Africa contributed 9m pounds and 90% of that was from the South African business.

South Africa is still the biggest market we have outside of the UK. The total number of staff at Turner & Townsend is 2,500, with 250 of those working in our Southern African offices.

You’re currently involved in a number of major construction projects in South Africa, including the new Durban International Airport and the Gautrain. How are they proceeding?

Our involvement on the Gautrain was in terms of cost management. There are a team of guys working on that, so we had a very discreet role. However, on the Durban International Airport project we have a very involved role. We have done project management, programme management and cost management. We are right at the coal face, and the project is going very well.

The big difference with Turner & Townsend is that we are a global business. Everyone shares in the company, there is no franchising. So we can move stuff around and transfer the right skills to certain offices. For instance on the Durban International Airport project the team comprised of people from Terminal 5 at Heathrow, Dublin airport, Vienna, Budapest. We have the ability to move these people around. The chance of finding all that expertise on airport construction in South Africa is nil.

With the Durban airport project, you had to gain environmental approval. How do you find dealing with government agencies on such projects?

From our perspective, we as a business are very happy that there are checks and balances in place. We found the guys very good and we’ve had no problems with getting the approval. Obviously in some projects there are time pressures, but we’ve found the agencies we had to deal with have been pretty good.

There are often complaints of too much red tape in first world countries. Is that a similar situation in South Africa or do you find it easier here?

In the private sector we haven’t found there’s an overly large amount of red tape. To be honest we’ve had very few problems with bureaucracy on our projects. It just hasn’t been an issue for us, but then we also don’t do that much government work.

Do you have any new projects lined up?

Yes, we have quite a few. We’re working on phase two of the Cape Town International Convention Centre project, although that’s still in the initial stages. We’re involved in a new 15,000m² building in Foreshore in Cape Town, and we have a number of construction projects in Johannesburg. We’re also working on the new headquarters for Barclays and Absa Capital in Sandton, which is due for completion in September 2008.

Investing in infrastructure has been touted as the best investment for Africa. How do you view the current level of infrastructure investment in South Africa?

We are pretty positive in terms of investment levels in infrastructure. There are clearly issues with utilities and public transport and there was a dearth of work from the government for quite a while but they now seem to be spending, and spending well. Spending on construction is still fairly low as a percentage of GDP. I think if we sustain current levels that’ll be great.

It seems T&T are working on a number of major construction projects at the moment. How do you view the future?

We have a unique business as we are very diversified in terms of the sectors we operate in. Retail is obviously beginning to take the strain now, with the rising interest rates. But the benefit we have is that we can move around and we are not significantly affected by issues like Eskom. All our offices are seeing growth so we are very pleased with our current position.