TOUGH conditions in the construction market were expected to catch up with SA's second largest construction group Murray & Roberts in the current financial year.

Although the year to June may have been a good one for hotel and leisure group Sun International, it expects the current one to be "challenging".

A Cape Town trade mission to Angola has found that there are massive opportunities for local companies in the construction and manufacturing business.

Angola's economy has been destroyed by civil war for over than two decades and now is in a re-building phase.

Chris Nissen, president of the Cape Town Regional Chamber of Commerce and Industry, led the delegation of businessmen.

"The mission found that the urgent need was for houses, clinics and schools ... and this has opened up opportunities for local builders as well as suppliers of products like paint and building materials." 

Angola, which uses the US dollar in most of its business transactions, was concentrating on rebuilding the country's infrastructure, Nissen said.

"The delegates are planning more trips to forge partnerships and joint ventures with Angolan firms," he said.

Interest in Angola was confirmed by a chamber waiting list of some 20 delegates interested in follow-up trade missions. - 

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 A20m takeout of minorities in SA construction group Aveng's Australian subsidiary McConnell Dowell moved a step closer to conclusion at the end of last week when a requisite body of shareholders backed the plan, Aveng said on Friday.

A surge in the cost of building materials is alarming the industry.

South Africa is boosting spending on roads, railways and ports in a bid to get business moving after a decade of fiscal austerity.

IDZs set to draw significant investment to SA, says bank.

Pretoria - Construction of the R300 million first phase of the Innovation Hub, the science and technology park on a part of the University of Pretoria's experimental farm, is scheduled to start in July.

Neville Comins, the chief executive of the Innovation Hub Management Company, said yesterday that the company would take transfer of the land "within weeks".

The farm on which it is located is adjacent to the N1 and N4 highways.

Current planning specified five development phases for the park, involving a total investment of R1.4 billion.

"Obviously a lot of that is private sector investment and owner-builder developments, with companies building research and technology centres on site," he said.

The Innovation Hub is a joint venture between Blue IQ, the development and investment arm of Gauteng's finance and economic affairs department, and the Southern Education Research Alliance, a strategic alliance between the CSIR and the University of Pretoria.

The hub is designed to support new technological research and businesses and has been operating as a pilot since its launch two years ago.

Comins said Gauteng was investing R258 million in the project, the bulk of which would go into the infrastructure and the construction of an 8 000m2 multi-tenanted building and a 4 500m2 innovation centre in the first phase.

The first phase would be about a quarter of the approved capacity of 121 000m2 of gross floor area on the 60ha site.

Potential clients included international hi-tech companies starting South African development operations, he said. Occupancy of the Innovation Hub was expected in the third quarter of next year.

"This will place the country on a new road of accelerated knowledge creation and commercialisation, and will spearhead the country's advance into the hub of global technology and world markets."

TURNER and Townsend, a global player in construction and management consulting with a strong presence in South Africa, has won Britain's Queen's Award for Enterprise in its international division.

The award recognises exceptional high standards of service in every country in which it has a presence. Group chairman Tim Wray said:

"This award recognises the skills and dedication of all our staff worldwide. It is a wonderful achievement and everybody at Turner and Townsend can take pride in it.

"The foundations we have laid within the group as a whole have given us the skills and confidence to take on new challenges and new markets all over the world."

For Wray, the Queen's Award was especially significant, since he was instrumental in starting the group's international operations 21 years ago with the first office in South Africa.

Other branches followed, in Europe and Asia-Pacific. Now with 36 offices, the majority outside the traditional UK base, the overseas staff numbers have risen from 191 to 367, while turnover figures have soared by more than 100%, doubling the international division's turnover and profit.

Southern Africa remains the group's biggest base outside the UK. The company tackles projects on any scale from domestic housing up to large-scale developments, such as the domestic terminal at Johannesburg International Airport.

Other large projects carried out is the Cape Town Convention Centre, which was secured against stiff international competition, as was the case for the De Beers head office in Johannesburg, due to be opened next month.

The Sonnenberg Hoffman and Galombik House office development on the Foreshore is due for completion in October 2004, and is the biggest office development undertaken in the CBD in many years. Ian Donaldson, Partner in Turner and Townsend Africa, said:

"The company has invested in its staff over a long period and has built up a strong skills base, with expertise that enables the African operation to compete strongly in the global market and provides the capability to undertake projects internationally.

Our South African business continues to grow steadily on the back of a diversified approach, with an ever-increasing number of blue-chip clients."