Jun 29, 2012
M&R wraps up problem contracts, looks to kickstart growth strategyBack
© Reuse this
The group earlier this year reported a R528-million loss for the six months ended December 31.
Laas said in a conference call on Friday that “work was basically complete” on the Australian Gorgon Pioneer Material Offloading Facility project, which he described as a major former cash-drain on the group. M&R was currently demobilising from the site.
A claims resolution process on this project was in progress, and the company was “satisfied with how it was progressing”, he noted.
The final link of the Gautrain project, in Gauteng, had also finally opened, in June, following nine-month-long remedial work to the tunnel owing to water ingress.
However, Laas said there remained a dispute on the interpretation of tunnel water specifications as per the concession agreement with the Gauteng government.
Murray & Roberts formed part of the Bombela consortium responsible for building and operating the rapid-rail link.
Arbitration on the water issue was expected to start in September, said Laas.
As the outcome was uncertain, M&R might still incur further costs on this contract, as the group could be forced to return to the tunnel between Rosebank and Part stations for further remedial work, he added.
Bombela’s larger Gautrain delay and disruption claim against government was continuing, with resolution expected only in 2014.
Issues around Eskom's Medupi power station had also been resolved through an in-principle agreement with the State-owned power utility.
Laas was also pleased that M&R finally had an agreement, again in principle, with a prospective buyer for its remaining steel business, with the company “hopefully” closing the sale before its financial results were announced in August.
More good news was that M&R’s order book remained strong, at more than R50-billion.
MIXED MINING OUTLOOK
Looking at the mining business specifically, Laas was pleased about growth achieved in the South East Asian, Australian and Canadian markets, with the South African platinum sector less of a star performer. A depressed platinum market had already taken casualties, with two major local shafts placed on care and maintenance in recent weeks.
Laas noted that M&R was “making good progress” in diversifying into other mining sectors.
As for the local construction sector, the company boss was hopeful of some recovery in the short to medium term.
He noted that it was still “tough out there”, with margins highly competitive “and low”. He expected, however, that M&R’s construction business would show “a significant improvement” going forward as all major loss-making projects had now been wrapped up.
Laas added that M&R had determined that its earlier provision for possible penalties under the Competition Commission investigation into collusion in the local construction industry had been sufficient, with the commission giving an indication of a fine above the minimum range of the provision, and below the maximum range.
“Hopefully we will reach a settlement soon.”
Edited by: Creamer Media Reporter© Reuse this Comment Guidelines (150 word limit)
Other Construction News
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
This Week's Magazine
South Africa remains an important manufacturing and export platform for Ford Motor Company, says executive chairperson Bill Ford. However, he adds that other countries on the continent are “becoming interesting”, and that the US carmaker is casting its net wider for...
Germany’s Max-Planck-Society (MPG) and the Max-Planck-Institute for Radio Astronomy (MPlfR) are investing €11-million (about R150-million) into South Africa’s MeerKAT radio telescope array programme. The money will be used to design, build and install S-band radio...
Infrastructure spend in sub-Saharan Africa will grow from $70-billion in 2013 to $180-billion by 2025, says PwC capital projects and infrastructure Africa leader Jonathan Cawood. This is one of the findings of PwC’s Capital Projects & Infrastructure report on East...
Private-owned defence and aerospace manufacturer Paramount Group and the Ichikowitz Family Foundation unveiled its Anti-Poaching Skills and K9 Training Academy in Magaliesburg last month.
The inclusion of Bluetooth to provide sub-three meter accuracy and heightened functionality for users is one of the ways to change existing wireless networks into engagement networks. An engagement network differs from common wireless networks in that it enables the...