THE COEGA PROJECT outside Port Elizabeth and roadworks elsewhere in the province have been identified as two of the main driving forces behind an upsurge in the South African construction industry. Neal Helps, director of the Construction Division at Alexander Forbes Risk Services says "many major government, government sponsored or government initiated projects which involve private enterprise are already under way - and there are many others on the drawing board. One example of this is the R2.6-billion deep-water Coega harbour project, for which the first phase tender was awarded late last year. Other major projects include a R2.7 billion upgrade of the country's airports, the N2 toll road development near East London, the Cape Town ring road and the Gautrain project.” Growth in the construction industry is taking place against a backdrop of other positive economic factors, such as the strengthening of the rand against the dollar, decreasing interest rates and declining inflation. Helps adds that sustained economic growth, a declining budget deficit and political stability in South Africa underpins the ongoing boom in local projects for the building and construction industry. A recent announcement made by the government of its intention to spend R67.5 billion to tackle the national infrastructure backlogs will fuel the construction boom. Central and local governments and state companies will lift infrastructure spending 27 per cent to about R67.5 billion in the 12 months to March 2004, according to the national treasury. The amount spent on capital projects will rise to R23.8-billion in 2004/05 and reach R25.4-billion in 2005/06. "The ripple effect of the boom in the building and construction industry is very significant,” says Helps. “Necessarily, the greatly increased expenditure in what is still a labour-intensive sector will support job creation while the prospects in downstream and associated industries offer opportunities for continuing black economic empowerment initiatives.