WHILE construction companies have hit hard times mainly because of the rand's strength this year, there is growing concern that the industry will not be able to meet demand in a few years. 

"The industry will need to double its capacity in about 10 years if government meets its 5% to 6% gross domestic product growth target," says the Construction Industry Development Board's CEO, Spencer Hodgson. 

The board is a statutory body aimed at enhancing the sector.

Economic growth at these levels would require construction growing significantly faster than 5% or 6% a year, says Hodgson.

The problem is that the construction industry is not retaining or attracting skills, he says. 

The board's deputy chairman Pepi Silinga has said there was "an urgent need to address the distressing capacity deficit" in the industry.

The small and shrinking portion of matriculants that have mathematics and science as subjects are opting for "lifestyle" careers, and no longer the construction sector, Hodgson says.

Henk Langenhoven, head of the South African Federation of Civil Engineering Contractors, agreed that the decline in SA's output of construction skills was worrying.

However, Langenhoven said that concern over industry's ability to cope with growth was invalid. He could not foresee economic growth of 5% to 6% materialising.

"This is because we need more gross fixed capital investment before we can reach these economic growth levels," said Langenhoven. "And the public sector does not have the capacity to spend this kind of money," he said.

He suggested the concern should rather be greater about government's inability to deliver.

He said several companies in the sector were, in fact, now considering cutting skilled jobs such as engineers, because the industry was in a poor state.

The strong rand, which had taken the steam out of mining projects, together with lack of government spending were the main culprits, said Langenhoven.

"There is virtually nothing coming out of the government departments at the moment," he said.

Langenhoven said there was a massive lag between the announcement of the budget in February and actual spending, which was not yet taking place.

The proposed Skuifraam dam in the water-short Western Cape illustrated government's inability to deliver projects, said Langenhoven. "This project has been on the cards for eight to nine years," he said.

Meanwhile, government's concern over the ability of the construction industry as the creators of infrastructure to cope with future demand, has prompted it to investigate several initiatives.

A construction industry week has been mooted by the public works department to raise the profile of the sector and awareness around it.

The concern over capacity is also one of the issues on a draft agenda for a construction sector summit expected to take place early next year.

Black empowerment and possibly an empowerment charter for the sector will be discussed.       

The Cape commercial property market is starting to follow the residential property market by using the auction mechanism as a first choice method of sale, says Auction Alliance CEO Rael Levitt.

When Peter Marais was Western Cape premier and David Malatsi his environmental affairs MEC, they allegedly received a R300 000 contribution to the New National Party from Count Riccardo Augusta. This was days before Malatsi allegedly approved the Italian's Roodefontein golf development in Plettenberg Bay.

Now a list has come to light raising suspicions that other developers may have been approached for contributions to the NNP in exchange for favours. (Planning permission is a local government or provincial matter, and normally political parties play no part in it.)

Last year, the FM suggested that, like some National Party politicians of old, (Malatsi) might abandon environmental concerns to favour developers who supported his New National Party. Malatsi denied this.

The NNP denies the list is a party list. Donations for development approval is corrupt and not indulged in, it says. Marais could not comment but Malatsi says it was drawn up on the instructions of NNP financial chief Johan Gelderblom. Anwar Ismael of Marais' New Labour Party says it would have been drawn up on the instructions of NNP leader Marthinus van Schalkwyk. The list has a Who's Who of Western Cape property developments, among them Big Bay on the West Coast, managed by developers Rabie, and Fynboskruin, a controversially approved project at Sedgefield near Knysna .

Many names on the list have planning application numbers for approval by the provincial authorities. Hout Bay developer Stanley Dorman (who has no applications pending) was visited on August 13 last year. "Afspraak (appointment) 13/8 - Baie klagtes (many complaints) - Chapman's Piek" was the remark.

Dorman confirms that visit. He had written to the province on behalf of the Hout Bay Trade & Tourism Association and the Hout Bay Harbour Development Board about the damage done by closing Chapman's Peak Drive.

"I was phoned by Malatsi's secretary," says Dorman, "who arranged for him to visit me at my office." He arrived with Gelderblom. "We went through the problems," says Dorman. "Towards the end of the meeting, they asked me straight out for a donation to the NNP. I declined as I am not politically involved."

The Chapman's Peak problem is still not resolved.

Other remarks, such as "OK", "nee" (no) or "self" (myself), are typed or handwritten near the names. Two developments have numbers next to them. One, at Strand in False Bay, has "15". A Jamestown development has "50".

Democratic Alliance environmental spokesman Robin Carlisle claimed in the provincial council, when he revealed the list, that there was "a systematic strategy to target developers seeking planning permission".

Van Schalkwyk had no comment for the FM.

“BIGGER is better” is the message being sent out by the property loan stock and property unit trust management industry. However, it’s one that property loan stock group Spearhead is choosing to ignore.

Nedbank Corporate Property and Asset Finance has agreed to finance a new multimillion rand Green Point development by Global Asset and Investment Network (Gain), a company run by Ari Efstathiou.

Ten smallholdings, all located in a security complex in Gordon's Bay, are to be sold by auction next week.

Fulfilling a promise made just over a year ago that Spearhead Property Holdings would significantly increase both the size and the quality of its property portfolio, Mike Flax, CEO of the company, has committed Spearhead to R110m capital expenditure to purchase three major landmark Cape buildings.

PURSUING its growth plan which is designed to add some 20% annually to its asset base and turnover, Spearhead Property Holdings, the JSE-listed property loan stock company, has formed a joint venture with the Lukhanyo group, one of the fastest growing black empowerment companies in South Africa.

The deals concluded by property unit trust Martprop in the past few months, combined with improved industrial sector prospects could restore the group's fortunes.

IT IS not every day that a property portfolio of the quality of Richway Retail Properties is available for sale at attractive capitalisation rates, say Primegro joint MDs Martin Ettin and Derek Greenberg, who have secured the portfolio.