Civil contractors benefit from infrastructure spending drive.

Posted On Monday, 14 October 2002 10:01 Published by eProp Commercial Property News
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The drive by the national and provincial governments to step up infrastructure spending, especially on roads, had helped pull the civil engineering industry...

Infrastructure IndustryThe drive by the national and provincial governments to step up infrastructure spending, especially on roads, had helped pull the civil engineering industry out of its 1999/2000 slump and it was now growing aggressively, Pierre Blaauw, the economist at the SA Federation of Civil Engineering Contractors, said last week.

In his latest economic bulletin he said that while medium and small contractors seemed to be benefiting most, large contractors still gained from some megaprojects. Large contractors tended to take up the slack by becoming more involved in projects in other parts of Africa.

Prospects for these projects were becoming more numerous under the New Partnership for Africa's Development initiative to upgrade infrastructure throughout the continent.

There were concerns that a too-rapid increase in spending on infrastructure could tax the already over extended capacity of local and provincial governments to process projects, Blaauw said. The industry itself could face potential capacity constraints regarding skilled staff.

Abdullah Omar, the minister of transport, recently told parliament that R130 million had been allocated to the national government for transport infrastructure provision and maintenance this year, focusing on rail and roads.

Blaauw said the provinces were expected to spend between R4 billion and R5 billion a year in the next five years on works and transport projects, a large slice of which would go to roads.

Omar said huge investments had been made in roads in the past few years, and R30 billion was needed for road improvements in the next five years.

Blaauw said it was unclear whether this would be over and above the R20 billion already budgeted for the provinces in the next five years. If it was extra, then capacity in the government and the private sector would be severely stretched.

But he was pleased that provincial governments were getting to grips with overall capital expenditure, which grew 44.7 percent to R11 billion in 2001/02.

Nazir Ali, the chief executive of the National Roads Agency, said the roads programme was picking up because provinces were getting better at spending their capital budgets.

Last modified on Tuesday, 05 November 2013 20:09

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