CONSTRUCTION of a R54m toll plaza building on Chapman's Peak drive will continue after a Western Cape judge on Wednesday dismissed an application to have it suspended.

The Hout Bay Residents' Association and nongovernmental organisation Habitat Council had argued that Western Cape Premier Helen Zille and transport MEC Robin Carlisle did not receive proper environmental authorisation to build the plaza, as required by the Protected Areas Act, and had to do so before construction continued.

Construction of the building, which had proceeded in the meantime, is on track for completion in May next year.

Judge Griesel said suspending construction while permission had been granted was "sheer pedantry, formality for the sake of formality", and that it would escalate construction costs.

He said the residents' association and Habitat Council had not asked the court to halt construction, nor were they asking any other judge to do so.

Hector Eliott, head of the Western Cape transport and public works department, said the ruling was "a common-sense judgment".

Residents' association president Len Swimmer said: "The fight is not over. Obviously we are very disappointed ... We are against the whole thing, and have been against it since 2002."

The two organisations are discussing with their legal advisers whether to apply to a judge for an order to review the placement of the office block.

Judge Griesel said it was calculated that suspending construction for a year would raise costs by R9m.

He also said no order had been made on costs, because to do so might scare off others who had legitimate concerns about protecting the environment.