Construction work on the R500 million rail line that would link Coega with the Port Elizabeth rail network would go ahead as planned and work would start in conjunction with the developments in the port of Ngqura, transport utility Spoornet said yesterday.

A final decision by French aluminium group Pechiney on whether it will build a R20bn smelter plant within the Coega industrial development zone (IDZ) in Eastern Cape is expected before November this year.

THE increasing emphasis on price and fast delivery in the built environment is threatening quality and safety says, Bill Copeland, director of consulting group Binnington Copeland and Associates.

Copeland says there has been a visible lowering of standards in the construction industry over the years, which can be linked to fast tracking of construction and budgets that are too low for the job in hand.

"In our instant society, longevity does not seem to be important any longer," says Copeland.

"It would still be great to create buildings and structures that would stand the ravages of time and would one day be monuments to our current aesthetic and technological capabilities," he says.

"Instead, we all know of structures that have already collapsed during construction or fairly shortly after construction," he says.

How many of our modern structures, despite the huge leaps in technological know-how, would still be standing in the next century, asked Copeland.

Peter Hunter, MD of Boksburg-based developer and contractor Clearspan Project, sees the solution in negotiated contracts as opposed to tender process.

He says that there are major advantages in negotiating a project with a reputable contractor in preference to putting it out to tender.

These include substantial cost savings.

"Tendering is an expensive process, and the costs must ultimately be passed on to the client," says Hunter.

In order to secure the job, the contractor will tender only for what is required, rather than suggesting alternatives which often save the client money in the long run, says Hunter.

He says the tendering process leads to "cost cutting at all costs".

The end result of which was often shoddy buildings that depreciated in value within a short period, he says.

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%.

Government will spend about R50-billion 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 of civil engineering contractors is equally upbeat, expecting nominal turnover from civil engineering alone to rise from about R16-billion last year to R20-billion 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 R170-billion social and economic infrastructure backlog.

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%.

Government 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.

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

The 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.

The success of tilt-up construction at the Gateway development at Umhlanga Rocks has been recognised with a major international award.

The Durban Marine Theme Park board, chaired by eThekwini mayor Obed Mlaba, had short-listed its preferred bidder to manage the R700 million uShaka Island Marine Park.

Construction firm Concor expects to be awarded work on the world's most advanced aluminium smelter if French firm Pechiney gives the green light for the plant to be built at Coega.

Concor has trebled earnings for the six months to the end of December, with attributable earnings swelling from R3.1m to R9.6m.