Port Elizabeth - The Coega Development Corporation (CDC) is expected to sign an agreement with Pechiney, the French resources giant, before the end of November.

Building activity in the residential sector had remained buoyant, but the nonresidential sector was struggling.

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

The 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

The emphasis on price in the procurement of professional engineering services could compromise quality

The taxpayer could face a R3-billion bill for the construction of the controversial Coega deepwater port and industrial zone, Parliament was told yesterday.

These are the milestones in the development of the Coega Industrial Development Zone and adjacent deep-water port: 1. Monday, February 19, 2001: Start of site preparation and construction of the temporary haul road from a quarry at Coega Kop six kilometres inland to the site of the port.

Work starts on the first phase of a R1,65bn deep-water port.

AN independent study by Stellenbosch-based Maritime Education Research and Information Technology (MERIT) has found that the Port of Ngqura is viable without the Coega Industrial Development Zone and more importantly, that South Africa needs a deepwater container facility at the port of Ngqura.

Home owners and developers have been warned about being over-optimistic about the effects of the proposed Coega development outside Port Elizabeth on local house prices.