Construction boom could shed Eastern Cape’s ‘Cinderella’ status in 2014

31 January 2014

An anticipated construction boom in the Eastern Cape could boost the province’s economic contribution to South Africa, the provincial Department of Economic Development, Environmental Affairs and Tourism (DEDEAT) said on Thursday.

“2014 could be the year when the Eastern Cape finally shrugs off the tag of being a minor contributor to the national economy and [an] exporter of human capital and starts to become a significant player,” the department said in a statement.

The growth of the construction industry in the Eastern Cape has led to a significant and continuing growth in employment for the province – faster than any other province during the first nine months of last year – with the industry employing 153 000 people, surpassing the Western Cape’s employment of 134 000 people in the construction industry.

Over the first nine months of last year, the number of people employed in the Eastern Cape’s construction industry increased by 25 000, with the change between the second and third quarters reaching 19 000.

The DEDEAT expected this trend to continue, with the number of people employed on the construction of the Baywest Mall set to increase from the current 600 to 2 000 by the middle of the year, and the creation of 1 300 direct jobs when the construction kicked off on Buffalo City’s multimodel original-equipment manufacturing facility in the East London industrial development zone (IDZ).

Legal challenges regarding the development of the Wild Coast highway were close to being resolved, allowing for the creation of 6 800 direct jobs and 28 100 indirect employment opportunities during the construction phase.

Further, the clearing of the catchment area, to allow for the construction of the Umzimvubu hydroelectric and irrigation scheme, would start in April.

The department also expected the province’s three ports, in East London, Port Elizabeth and Coega, to attract a collective R1.55-billion in investment during the 2014/15 financial year, with the various projects connected to the expansion of Coega’s Port of Ngqura, creating more than 2 000 jobs.

Meanwhile, Elitheni Coal had resolved its immediate financial challenges and production would resume at the mine, 90 km north-east of Queenstown, creating a significant number of both direct and indirect jobs. The company was now looking to secure long-term financing.

Further, in December, the DEDEAT launched the two-year, R16-million, first phase of shale gas exploration across four of its district municipalities, namely the Cacadu, the Amathole, the Joe Gqabi and the Chris Hani district municipalities.

The DEDEAT also previously pointed out that the shale project dovetailed with the initiative to make the Eastern Cape a “new energy hub” of South Africa that included a substantial number of wind farms and potentially a nuclear power plant.

“This year will also see the completion of the feasibility study for Project Mthombo, the oil refinery planned for the Coega IDZ, and a decision will then be taken on whether to proceed with the front-end engineering design stage, which involves the detailed design,” the DEDEAT said.

While the decision on the construction of Nuclear 1 at Thyspunt was likely to be delayed, the department said the focus would remain on exploration for shale gas and what it dubbed the “big gas” scenario.
“And that holds enormous prospects for the Eastern Cape.”

By: Natasha Odendaal

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