Page 29 - Energize February 2022

NEWS

The right labour partner is critical to accurate

budgeting for successful IPP bidders

s the 25 successful preferred bidders from Bid Window 5 of the Renewable Energy
IPP Procurement Programme (REIPPPP) prepare for financial closure, budgeting
Aaccurately becomes critical. During the upcoming construction phase, the labour
component makes up a significant portion of this budget but getting this costing right can
prove challenging. Oxyon People Solutions, specialists in recruitment around energy and
utilities, are geared to assist.
“One of the requirements of the project is that 40% of the total cost must be sourced
locally. Since the components and technology to build the plants must be imported, meeting
local procurement requirements means sourcing labour locally. However, many of the
successful bidders are global entities that may not fully understand the intricacies of the
South African market and labour force,” says Viren Sookhun, MD at Oxyon People Solutions.
“All of the IPP projects are being constructed in rural areas, where there is often low
income, a high rate of unemployment and a lack of service delivery. There is therefore
significant potential for these projects to create friction if they are not appropriately
handled. Successfully negotiating with local communities is critical, which requires
established relationships with the community leaders and ward councillors,” he adds. Viren Sookhun
One of the most significant challenges is that labour costs in these areas can be a lot
higher than anticipated, because each community may demand different wages, which are labourers, including human resources,
often a lot higher than the minimum wage that is budgeted for. Having the right partner is key payroll, industrial relations and more.
to successfully engaging labour and businesses to find a middle ground that is agreed upon in “In projects such as the construction
writing, which will help to alleviate problems and potential industrial action down the line. of IPP plants, any delays could cause
“In such a volatile environment it is essential to lock these details in from the outset. significant dents in profitability and
Any project delays, such as strikes or unrest, could result in power producers being unable viability. Having a local partner is
to connect on time, which in turn will result in penalties. Oxyon can assist with identifying essential in smoothing over potential
key stakeholders ahead of time, and we have vast experience and existing relationships with bumps and hazards throughout
leaders in these communities, so we can help new IPPs to budget effectively and accurately the process, from bidding through
and guide projects from beginning to end,” says Sookhun. to establishing, distribution and
In addition, as part of Workforce Holdings Ltd, Oxyon has the collaborative capability maintenance,” Sookhun concludes.
to create sustainable employment and community development. Through partnerships
within the holding company, Oxyon can provide training to upskill employees, through Contact Viren Sookhun, Oxyon People
qualifications that will uplift communities and enable them to find employment once Solutions, Phone 011 869-3857,
projects conclude. In addition, IPPs are able to outsource all of the admin tasks around info@oxyon.co.za

Contact Katia dos Santos

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Cell: 076 410 6909 • Email: katias@nowmedia.co.za