Chemical Technology

Chemical Technology • November 2015

What challenges are faced

when performing EPCM and

EPC projects in Africa?

nfortunately, it seems that South Africans entering

another country in Africa to perform work, tend to

be arrogant, assuming that the locals are not suf-

ficiently educated and are incapable of filling positions in

construction. This generally causes the local leaders and

citizens to ‘put up the shutters’, which then adds to the

challenges and makes communications, negotiations and

resolutions of issues difficult. I have had the experience

where there are locals that do have technical knowledge

but not necessarily the associated experience. The suc-

cess of any project is very reliant on the capabilities and

competencies of the people making up the task force as

well as their knowledge of the country and its challenges.

Knowledge is also a great starting point from which people

can be trained. Therefore there is often a resource pool

on your doorstep that can be tapped into with a win-win

result for client, contractor and local citizens, if the correct

upfront strategising, approach and planning are done.

Below are some of the challenges that some of my col-

leagues and I have experienced when executing projects

in African states north of South Africa as well as in South

Africa. Those who have worked in the various countries of

Africa will certainly be able to add experiences to the list

of challenges.

Understanding the tax implications

Companies entering the project scene in Africa for the

first time and those who are ‘old hands’ at it, should be

aware of the taxes that can be encountered in the various

African states including South Africa. Although Africa is

one continent, the system of taxes varies from one country

to another. Some tax authorities are more efficient than

others, but the skills and knowledge of the tax authorities

within Africa are improving yearly and are becoming more

and more electronic-based with links to multiple divisions

within the tax arena and therefore new tax types are being

added and old taxes are being modified.

Below is a sample of the more common taxes that can be

encountered in Africa:

• Withholding Tax – An income tax on services, royalties,

Africa is a relatively untouched continent

when it comes to mineral resources.

Many large mining houses are showing

a bigger interest in Africa than before

and South African project companies

are also showing a greater interest in

African projects.

by Trevor Arlington – Project Manager at Fluor South Africa (Pty) Limited