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Jul 16, 2009

Real Economy Report

RER 68
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From Creamer Media in Johannesburg, this is the Real Economy Report. Our top stories this week: the first phase of the Gautrain heads towards its 2010 completion date; we discuss the greatest base-metal discovery since the Copperbelt; and, Ernst & Young highlight the risks and opportunities for African construction companies.

Shannon O'Donnell:
The first phase of the Gautrain, the link between the OR Tambo International Airport and Sandton Station, is rushing towards its 2010 completion date. Irma Venter takes a look at the progress on this part of the rapid-rail project.

Irma Venter:
The Gautrain project is around 65% complete, with an estimated R17,5-billion of the project budget of R25,4-billion already spent. The project, being constructed by the Bombela consortium, is to be completed in two phases.

The first phase includes the network between the OR Tambo International Airport and Sandton, and includes the stations at the airport, and at Rhodesfield, Marlboro and Sandton, together with the depot and operations control centre located near Allandale road, in Midrand. The second phase, being constructed concurrently, will be completed in 54 months, in 2011. It includes the remainder of the rail network and stations linking Sandton to Park station, in Johannesburg, and the route from Midrand to Hatfield, in Pretoria.

The journey between Sandton and airport will take 15 minutes, and construction work is progressing well, says Bombela OR Tambo International airport site engineer Kevin Alix.

Bombela OR Tambo International airport site engineer Kevin Alix

Irma Venter:
It has been a big debate whether the Gautrain airport link will be ready for the 2010 FIFA World Cup, with Bombela's contract only stating that it should be wrapped up at the end of June, this while the World Cup kicks off on June 11.

Gautrain Management Agency CEO Jack van der Merwe says that a decision will have to be made on whether phase one of the project now needs a cash injection to be finished in time for the sports event.

He says government is currently in talks with Bombela to accelerate the project, and that it will have to decide whether it will be prepared to pay the bill to have the airport rail link ready for the World Cup kick-off.
He says the rail project has never been a 2010 project. The project was announced in 2000, with the FIFA World Cup awarded only in 2004.

However, he adds that there is a "need and desire" from government to finish phase one of the project in time for the global sports event.

Van der Merwe says that he has been hopeful to make an announcement on the possible fast-track of the project this month, but that he is now targeting August or, at the very least, the next three months.

Shannon O'Donnell:
Explorers have stumbled across what appears to be the greatest base-metals discovery in Africa since the discovery of the Copperbelt in 1897. Martin Creamer speaks to the executives of African Eagle about the highly prospective Dutwa, in Tanzania.

Den Braven advert

Chris Davies, operations director, African Eagle

Mark Parker, MD, African Eagle

Martin Creamer:
Dutwa, a nickel laterite deposit in Tanzania, is situated 100 km east of Mwanza city, in the so called "money hill", the greenstone belt of the Lake Victoria Goldfield.

Euan Worthington, deputy chairperson, African Eagle

Martin Creamer:
African Eagle began its drilling programme in June 2008 in order to investigate the strong nickel and cobalt geochemical anomaly extending for more than two and a half kilometres over a hill.

Chris Davies

Bevan Metcalf, financial director, African Eagle

Chris Davies

Martin Creamer:
Dutwa is expected to eventuate into a low-cost mine in 2012, when some analysts are forecasting a nickel price of $8/lb.

Shannon O'Donnell:
Business advisory firm Ernst & Young highlights the risks and the opportunities facing construction companies in Africa.

Chanel Pringle:
Ernst & Young business development director John Wetton does not expect to see sparkling growth for the local construction industry this year and says there are many risks facing construction companies.

Ernst & Young business development director John Wetton

Chanel Pringle:
However, he says there are also still many opportunities available for the industry to take advantage of.

John Wetton

Shannon O'Donnell:
And now for a sneak preview of this week's Engineering News magazine:

In our cover story, we highlight how undersea telecommuncations company Seacom's landing will catalyse a pricing and capacity evolution, be we're warned not to expect a revolution.

The Industrial Development Corporation prepares to join a host of other State-owned enterprises in making a significant re-entry into the capital markets next year.

And, the chairperson of the newly inaugurated Technology Innovation Agency, Mamphela Ramphele, promises to make new ideas bankable.

And in Mining Weekly this week:

Read our cover story where we showcase the Russian mining industry, which seems to be showing some signs of recovery from the global recession.

We report that South Africa's State-owned mining company might create its first opencast coal mine by the end of 2010.

And, we report that Africa-focused diamond-miner Stellar Diamonds is considering several consolidation opportunities.

Shannon O'Donnell:
That's Creamer Media's Real Economy Report. Join us again next week for more news and insight into South Africa's real economy.


Edited by: Creamer Media Reporter
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