Murray & Roberts sets up three joint ventures to pursue Eskom tenders
MURRAY & Roberts (M&R), the listed multinational engineering and construction group, has established three separate joint ventures to pursue Eskom tender opportunities.
Eskom’s latest transmission development plan released last week revealed that the power utility planned to add about 6 500km of high-voltage transmission lines and 46 000 MVA of transformer capacity in the next 10 years.
M&R yesterday also referred to the R2.9 billion loan secured by Eskom from the African Development Bank for the upgrade of its transmission infrastructure, adding its power and water platform had established two joint venture to pursue these opportunities.
A joint venture with Ramagale Holdings would tender for these transmission infrastructure opportunities in South Africa, while a separate joint venture with Optipower Projects would pursue similar opportunities in sub-Saharan Africa.
M&R has established a third joint venture with the Southern Palace Group and Worley Parsons, which has submitted a major tender for repair and maintenance work on 15 Eskom power stations.
A Southern Palace Group-led consortium in 2016 acquired M&R’s Southern African infrastructure and building businesses for R314 million.
M&R said the Medupi and Kusile power stations were nearing completion and the baseload coal independent power producer procurement programme in South Africa continued to be delayed.
“In response to the limited new build opportunities in the power sector, the platform is targeting the broader power sector by pursuing power plant repair and maintenance work in South Africa and high voltage transmission projects in South Africa and sub-Saharan Africa,” it said.
M&R said the platform last monthsecured two new projects with a combined value of R600m for work on a sulphur dioxide abatement facility for Anglo Platinum and the structural, mechanical, pressure parts and piping erection of a recovery boiler for Sappi.
The group said despite the dire state of water infrastructure in South Africa, investment in this sector was limited, but it remained well positioned to pursue opportunities as they came to market.
It said power and water platform’s order book reduced to R900m in September from R1.5bn in June, largely due to the Medupi and Kusile power station projects nearing completion.
However, M&R said its order book for continuing operations increased to R31bn from R30.1bn in the same period, with near orders increasing to R9.2bn from R7.9bn, predominantly in the underground mining platform.
It said opportunities in the liquid natural gas (LNG) sector remained limited after years of project delays, but the crude oil price had stablised above $70 (R1 030) a barrel and new LNG supply must be developed in the near term to meet the forecast LNG demand from 2021/22.
The group said the global business of its underground mining platform was performing well and experiencing increasing demand for its services as the minerals sector was in the early stages of an upturn cycle.
M&R said the underground mining platform was well positioned to achieve strong growth over the next few years, the oil and gas platform had significant potential while the power and water platform was expected to become a smaller business because the mega-Medupi and Kusile projects were nearing completion.
Shares in M&R rose 2.30 percent yesterday on the JSE to close at R17.38.