Perlman: Interesting pilot project in regards to infrastructure roll-out in poor municipalities. What is that all about?
Creamer: Yes, the South African Association of Consulting Engineers and the Departments of Provincial and Local Government are partnering a pilot project in local municipalities. The idea is to have projects rolled-out and at the same time create capacity. So, the consulting engineers will become the municipalities implementing agent and also their mentor so that the informed client base can be built up within these municipalities, which will help with infrastructure development. It is again this whole issue of capacity and how it is built up by interaction. The five municipalities have still to be named. It is in these five that the Department of Provincial and Local Government and the South African Association of Consulting Engineers will work together, the association acting as both implementing agent and as mentor to build up capacity so that in the future local authorities can become a more informed client base and at the same time benefit from new infrastructure.
Perlman: Martin, we are going to need a lot of cement if all the infrastructure plans are to come to fruition. I believe the Danes are getting involved in that.
Creamer: A Danish company has won the big main contract at the R1,36-billion Batsweledi cement project. That is the first in South Africa in 16 years, in fact, we haven't had a cement kiln put in for a quite a long time. This is the project that is being brought to realisation by PPC, South Africa's biggest cement producer, which is a little concerned that, from next year, South Africa will start seeing its cement capacity reach its limit and we need to extend from the 14,7-million tons capacity it has. So, by April in 2008 South Africa will be producing 1,25-million more cement tons. PPC will do this both at its Dwaalboom factory, that is where most of the action will take place, and also at its Jupiter factory in Germiston, which is being upgraded. It is a twin location effort that will make sure that South Africa has the required cement capacity. In the meantime, four contracts have been let, the biggest goes to FL Smidth of Denmark, a very well versed company in the cement business, which in fact supplied the plant to the original Dwaalboom factory.
Perlman: News from the energy sector from the Western Cape.
Creamer: Yes, we hear a lot know about the Western Cape taking steps to become this oil-and-gas hub and we saw the catalyst in action this week with the German company MAN Ferrostaal offering a sweetener of R220-million. Of course, MAN Ferrostaal is obliged to do that by way of their offset obligation stemming from the defence contracts it won for building the corvette frigates for the South African Navy. Ferrostaal now has to give something back in reciprocity and this has enabled the long-awaited idea of getting an oil-and-gas repair hub in the Western Cape to go-ahead. We see that in the days of Van Riebeeck and the Dutch East India company, people used to call at the Cape for fresh vegetables, in the future they will call there for freshened-up oil-rigs, instead of taking them to the Far East or Middle East, they will bring them to Cape Town, which the sums say is more competitive. Also, there is this massive boom of oil-exploration along the West Coast and Cape Town is the nearest port of call that has infrastructure. Moreover, the Americans announced yesterday that they plan to invest something like R60-billion a year in the African oil industry and that they believe that Africa can replace the Persian Gulf as a major source of oil. So, there should be a lot of oil platforms coming down to the Cape, and not only for repair but the Western Cape initiative is hoping to also have new project operations where they can build new rigs. They are resuscitating the old Saldanha plant, where the Mossgas platform was built, so they know how to do it, and also a berth in Cape Town harbour for repair of oil-and-gas equipment.
Perlman: Good news for the Western Cape, concrete development in the cement industry. Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly, he'll be back with us at the same time next week.