Monday, 16 August 2004 02:00

Three-year power shock for Jo'burg

SA's economic powerhouse faces R2bn electricity grid upkeep bill

With coal reserves dwindling, nuclear power is an option for the future and government is considering more Koeberg-type plants

Tuesday, 18 March 2003 02:00

Construction sees good growth

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 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%.

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.


Monday, 03 February 2003 10:01

Strength in SA economy gives PPC a boost.

Upswing seen for building, construction.

Friday, 01 November 2002 02:00

Cement price hikes 'hurt building sector'.

Members of the building industry are reeling from the shock of a proposed 20% hike in the price of cement. This follows a double digit price rise in the past year.

Construction IndustryThe proposed price rise is likely to lead to a substantial increase in building costs. Stellenbosch University's Bureau for Economic Research (BER) warned yesterday that, together with higher interest rates, a weighty rise in the price of cement would contribute to building work being less affordable and would lead to a slowdown in demand.

Ultimately, this will have a negative effect on the economy.

Cement producers PPC, Alpha and Lafarge would not comment on what their price hikes would be yesterday. However, a number of concrete product manufacturers have said that PPC, for one, had indicated a 20% price rise in January.

The rise would not be applicable to all clients, because prices vary between clients and cement product types, but double-digit rises were expected all round.

The BER's Charles Martin said cement sales were on the rise for the first time in years, and that now would be considered an ideal time for cement producers to introduce substantial price hikes.

PPC and Alpha said their price hikes were based mainly on increases in their input costs, which were affected by the depreciation of the rand. Capital equipment and spares, for instance, were sourced mostly from the US and Europe.

PPC also fingered Spoornet's prices and inefficiency as contributing factors to rising cement prices. Colin Jones of PPC said problems with rail availability had forced the cement producer to switch to more expensive road transport in some instances.

PPC and Alpha said price shifts were not based on attempts to come in line with international pricing or to move towards import parity pricing.

Lafarge declined to comment on price strategy issues.

The cement buyers said the reasons given for the increases were reasonable, but 20% was beyond what could be justified.

Several cement buyers have also accused producers of continuing to operate in a cartellike fashion. PPC, Alpha and Blue Circle operated as a cartel until 1996, when it was officially disbanded. A price war ensued in an attempt by the producers to secure market share.

 

Friday, 08 February 2002 03:01

Toll road to link Maputo Walvis Bay

Platinum Toll Highway is launched

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