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
Other Construction News
Updated 4 hours ago The death Thursday of South Africa's liberation leader and first democratic president Nelson Mandela triggered an unprecedented worldwide chorus of awed respect. Statesmen, resistance leaders, Nobel laureates and prisoners of conscience have died before, but never...
Updated 5 hours ago Nelson Mandela, who died on Thursday, once the world's most famous political prisoner, emerged from a 27-year jail term in 1990 to lead South Africa from apartheid to democracy. President Jacob Zuma announced his death on the public broadcaster just before...
Recent Research Reports
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
Road and Rail 2013: A review of South Africa's road and rail infrastructure (PDF Report)
Creamer Media’s Road and Rail 2013 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...
Liquid Fuels 2013 (PDF Report)
Creamer Media’s 2013 Liquid Fuels report examines South Africa’s liquid fuels market, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing,...
Projects in Progress - Second Edition (PDF Report)
Creamer Media’s second Projects in Progress supplement considers some of the major project developments under way, including high-profile energy and transport projects, as well as a few of the lower-profile public and private developments. What remains apparent is...
Water 2013: A review of South Africa’s water sector (PDF Report)
Creamer Media’s Water 2013 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.
Canadian Mining Roundup for June 2013 (PDF Report)
The June 2013 roundup includes details of the development of TSX-V-listed Aldridge Minerals’ flagship Yenipazar polymetallic project, in Turkey; the Canadian Nuclear Safety Commission’s renewal of Cameco’s uranium mining licence pertaining to the Cigar Lake...
This Week's Magazine
Updated 7 hours ago Mitsubishi Motors South Africa (MMSA) has introduced a 4x2 derivative of its Pajero Sport sports-utility vehicle (SUV), which will give it access to a substantial slice of the full-size SUV market, where it will compete with the likes of the Ford Everest, Chevrolet...
Updated 7 hours ago South African Energy Minister Ben Martins has affirmed that the government wants the country to be globally competitive in the nuclear sector. "Our responsibility has always been ... to ensure that, in nuclear energy, South Africa can compete with the rest of the...
Updated 7 hours ago Mercedes-Benz South Africa (MBSA) president and CEO Dr Martin Zimmermann describes the new S-Class as “a special place to be”, with the car creating a sense of “wellness” once you are seated inside the German brand’s flagship model. It is difficult to argue...
Updated 7 hours ago Water scarcity and water-quality issues are broadly recognised and understood in most political, business and civil organisations in South Africa, but solving water issues will require wide and continuous action in catchments and municipalities by organisations and...
Updated 7 hours ago Work is well under way on the R212-million Imvutshane dam, 30 km north-west of Stanger, in KwaZulu-Natal, which is a key link in supplying people in rural Maphumulo with a reliable source of safe drinking water.