The potential order book for the newly-formed Murray & Roberts (M&R) Projects division was “massive”, with M&R Engineering Southern African Development Community (SADC) cluster executive Sean Flanagan saying that there was significant work for the operating entity in the power, water, oil and gas, and mining and minerals beneficiation sectors in the SADC.

There was significant opportunity to convert these work opportunities into profit for the South African construction and engineering group, he added during a briefing on Monday.

M&R had, in July, combined its M&R MEI and its M&R Engineering Solutions operations into a single entity, called M&R Projects, to cater for the changing requirements in the large industrial project landscape.

M&R Projects MD Gary Wells explained that, by combining these two entities, it was providing a solution to a requirement in the large industrial project market, which South Africa had not previously had the capacity to respond to, particularly with regard to public sector projects.

The new entity would serve as the engineering, procurement and construction (EPC) projects implementer of the M&R group, taking the projects forward from the technology decision phase.

The client would decide on a particular technology to use for a project and M&R Projects would manage the detailed design of the project to ensure the constructability of the project, as well as the construction.

The entity was planning on getting involved in industrial projects, particularly larger work packages, earlier, to ensure that the implementation of technologies, which were mostly foreign, was done in a feasible manner.

This would enable it to deliver better projects, faster and at a lower cost, while also taking into consideration the local environmental constraints to developing projects.

Flanagan noted that this benefited clients, because local construction and engineering providers, like M&R, understood how best to design and build projects in the local environment.

He said that foreign contractors often did not take into account what the full impact of aspects, such as the South African labour market and empowerment requirements, on a project could be.

M&R Projects’ offering included industrial design, labour management services, project management, risk management and capacity building, among others.

It was also able to integrate the M&R Group’s multidisciplinary capabilities and capacities, as well as that of its partners, in the delivery of projects.

Wells highlighted that labour management was formerly considered to be a soft issue in terms of project delivery. However, this was an issue South African project developers had to focus on more and more, as labour was becoming the backbone to making a project feasible.

Wells and Flanagan noted that it was important for construction and engineering entities to get involved in projects during the feasibility stage, as it was important to deal with issues, such as labour and supply chains well in advance of the start of construction of a project.

This was especially important if projects were being developed in remote areas of a country, where the locals expected to benefit from the project through job creation, despite not having the skills.

It was important for the locals to be provided with skills development and training opportunities before the start of the project.

South African contractors had to be more proactive in this regard, and get involved in projects at an early stage to ensure that the capacity was in place beforehand and that supply chains could be established well in advance of the start of a project, Wells emphasised.

Meanwhile, Wells said that M&R Projects had a select client base, which included Eskom, PetroSA, Sasol and Xstrata, and that the entity would in the coming weeks discuss the new structure of this entity with its clients.

The division had retained the work it was doing for the new Medupi and Kusile coal-fired power stations, contracts that were worth nearly R9-billion, while the remainder of the projects had been moved to other entities within the M&R Group.

Flanagan noted that the two power stations would, for the time being, remain the focus of M&R Projects, which has also been selected as a preferred bidder on a number of general industrial projects.

Another project that it was targeting was the 400 000-bl/d crude oil refinery at Coega, Project Mthombo. It was aiming to get involved in the early front-end engineering design phase of the project.

It was also conducting further research studies in its selected markets, to determine which of the identified opportunities it should focus on, going forward.