The Airports Company of SA (Acsa) has projected expenditure of R2,7bn for infrastructure improvement and expansion for the period 2002-2007, Acting Transport Minister Jeff Radebe said yesterday.

Tuesday, 10 June 2003 02:00

Five-year road strategy approved

Cabinet has approved has approved a five-year road infrastructure strategy

THE construction sector is confident that it will again experience good growth this year after a brisk last year that saw the sector expanding by 5,32%.

Construction IndustryGovernment will spend about R50bn on construction projects over the next three years. This represents real growth of 12% a year for the sector, says Carl Grim, CEO of Aveng, SA's largest construction company. The federation ofcivil engineering contractors is equally upbeat, expecting nominal turn over from civil engineering alone to rise from about R16bn last year to R20bn this year.

Optimism in the sector stems from the expected decline in inflation and
interest rates, together with the recovery of the rand against the major
currencies and other factors.

SA's economy is expected to continue expanding at a rate of 3% a year.
"This growth would in part be brought about by government expenditure as
well as private investment, which will support growth in gross fixed capital
formation," says the federation's Pierre Blaauw.

"Prudent finances have culminated in a declining budget deficit which,
coupled with government's focus on infrastructure development, holds great
promise for the civil industry," Blaauw says.

Federation members were encouraged by increased tender activity in the
latter part of last year. However, Blaauw says underspending due to
institutional capacity problems is still preventing the full benefit of
rising government capital expenditure from trickling down to the industry.

The industry is planning a summit at which some of these issues will be
discussed. Meanwhile, some construction analysts have said that SA's rate of
capital expenditure is still not high enough to catch up on the country's
R170bn social and economic infrastructure backlog.


Tuesday, 25 February 2003 10:01

Stanlib keen on construction

Stanlib Asset Management is bullish on the SA construction sector with the bulk of its funds substantially overweight in this area.

Construction IndustryThe fund manager has taken a strong view on companies such as Aveng, Murray & Roberts and Barloworld due to substantial investment in SA infrastructure.

The Stanlib quarterly market overview blamed the underperformance of its flagship Liberty Wealthbuilder fund on the funds mandate. Wealthbuilder has higher exposure to international companies than its peers and less exposure to medium and small cap companies, a sector which outperformed the market by 30% over the past year. International equities lost 28% over the same period.

Imtiaz Ahmed, the funds manager and head of multi manager clients at Stanlib asset management, said: 'The fund has underperformed, but has remained true to its benchmark. It does not subscribe to the latest investment fads. Other general equity funds have performed well because of their mid and small cap holdings, but there is greater risk involved with this strategy.' He said there would be 'two or three' interest rate cuts this year, and predicted that SA equities would outperform SA bonds over the year.

Paul Hansen, director of Stanlib retail investments, said it was unrealistic to expect the rand to stay at current levels through the year. 'For 14 consecutive years the rand lost value against the US dollar,' he said. 'The law of averages says this can't be sustained although the rand is an extremely difficult currency to make a call on.'

The Stanlib house forecast is for the rand to be at R10,75/ by the end of the year, which Hansen conceded looked a little unrealistic at present. 'The balance of probability is that the rand will be weaker this year,' he said.

Stanlib also outlined the time scale for the continued integration of Standard and Liberty businesses for this year. The group expected to complete its rationalisation phase this year, a stage which would include the unit trust conversion process and business process alignment, the fund manager announced.

 

 

Wednesday, 08 January 2003 10:01

Investors line up for East London.

Johannesburg - The industrial development zone (IDZ) in the Eastern Cape's second-largest city, East London, is well advanced, with two tenants already signed up and seven deals worth between R3 million and R3.5 billion under negotiation.

Wednesday, 16 May 2001 03:01

Coega plan just pie in the sky

Management says new report is rehash of old, flawed reports.

Major metro economic development projects are on target and progressing according to plan, says Metro economic development, tourism and agriculture portfolio councillor Mike Kwenaite.

The drive by the national and provincial governments to step up infrastructure spending, especially on roads, had helped pull the civil engineering industry...

Thursday, 12 September 2002 02:00

The lure of a record low

 Overcapacity in the building industry and a weak rand have pushed SA building costs to historic lows against other countries.

Construction IndustryThe highest contract price of an air-conditioned office building in SA is now only US310/m² - 13% of the 2 350 cost in the US - according to a survey by international consultants E C Harris. It is only 42% of the $730 top cost in Slovakia, the next lowest on a list of 35 countries . Japan is the highest at $2 630/m².

'The price differential is at the point where it means multinationals will now open in SA because the setup cost is so low,' says Harris's head of cost research, Paul Moore. 'The low costs are reinforced by low labour costs, an important component of building.'

But it could also mean higher building-cost inflation: building costs rose 20,4% annualised last quarter.

Moore says there are also signs that SA contractors are using their price advantage to build up business elsewhere in Africa. 'With no funds for tourism or infrastructure, they are looking for outside opportunities, especially in the north,' he says.

Harris forecasts military construction will rise 17% this year as private property development slows down.

 

The civil engineering industry is reaping the rewards of increased spending on infrastructure

Page 25 of 26

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