Nkandla architect’s R16m fee is ‘reasonable’ - industry

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24-03-2014
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Moneyweb
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Somehow the cost must have been authorised - architect.

After Public Protector Thuli Madonsela released the much awaited report into President Jacob Zuma’s Nkandla R246 million home upgrade last week, the spotlight has now turned to another protagonist of the project.

Madonsela’s report revealed that Zuma's architect, Minenhle Makhanya, cashed a cool R16.5 million from the refurbishments, raising questions of whether the compensation fee is justified.

“When an architect is paid R16 million for services rendered, and depending on a variety of issues, one can expect the construction value to be approximately R270 million and the architect to have rendered a full service,” Eugene Barnard, chair of the practice committee for the South African Council for the Architectural Profession (SACAP) told Moneyweb.

Architect’s fee not over the top

A ‘full service’ refers to an architect being hands-on in the construction from the design of the project to its completion. Partial services could range from an architect offering architectural designs only.

Kevin Els, an architect at Evolve Architects, explains that the fee Makhanya received was not necessarily “over the top”, however he describes the escalated projects costs at Nkandla as a “cash cow”.

Els further states that the architect’s fees cannot be disproportionate to the size and scope of the project, without a proper justification thereof.

The role of an architect involves many responsibilities and the profession requires the wearing of many hats, Els explains.

For example, throughout the Nkandla construction, the architect could have been involved in “designing all architectural plans, security design elements, public knowledge or not, as well as involvement in site management, engaging with quantity surveyors, the relevant town planning, structural engineers and the general variation orders during the project”.

Els states that it must be understood that there are six vital stages to the engagement of the architect. The question now arises as to whether the architect was responsible as the principal agent for all the required stages or not.

“The more complex the project is, the more expensive it will be. When it comes to government especially, there must be control mechanisms in place to manage costs. Somehow it (cost of project) must have been authorised,” he says.

The cost of the project stood at R65 million in 2009, and subsequently ballooned to R246 million.

Madonsela also implicated the Public Works Department for being lax in controlling the cost of the upgrade. All Public Works ministers dating back to 2009 provided incorrect information on the extent of the work done on Nkandla, Madonsela reported, leading to upgrade costs increasing four-fold.

Another architect at an independent firm, who wished to stay anonymous, explains that project costs cannot be fixed as construction costs may increase together with an architect’s compensation fee. The amount due to the architect will be subject to review during the beginning and end of the construction project.

“Cost control is the quantity surveyor’s responsibility on all the drawings and cost of project and the contractor puts in prices of building material,” the source explains.

This also speaks to the role of a quantity surveyor who in theory has to establish the cost of project in “highly accurate way”. In Madonsela’s report, R&G Consultants were the quantity surveyors in the Nkandla upgrade and the company was awarded R 13.7 million.

Another architect who wished to remain anonymous says architects’ tariff rates are open to negotiation from the recommended tariff. In some instances, architects can negotiate for a “higher or lesser fee” and sometimes it boils down to how competitive they can be.

The architect adds: “The architect at Nkandla received just a little bit more than what is recommended by the government gazette, if full services were rendered. In practice however, the architectural fees for a project of that size could easily be reduced closer to 3% or 4%”.

On whether Makhanya’s tariff fee represents the standard compensation fee, the architect says it does not seem unreasonable based on the value of the Nkandla project.

“A project of that value must have taken at least a year-and-a-half to well over two years from start to finish, with at least three to ten people working on it, depending on many factors…. Considering the lead time and amount of professional resources it would require, the recommended tariff fee is very much in line”.

But what can R246 million afford in construction development? The architect says that in terms of scale, approximately R250 million building costs could build anything from a medium sized mall to a 15-story office block.