Chemical Technology November 2015

What challenges are faced when performing EPCM and EPC projects in Africa?

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

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.

U 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,

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Chemical Technology • November 2015