Govt’s R1.8bn office project goes to WBHO

JSE-listed construction and engineering group WBHO has been awarded a R1.88 billion public-private partnership (PPP) contract to build new office accommodation for the department of rural development and land reform.

It is to be developed on the site of the old Berea Park cricket and soccer grounds at the southern entrance to Pretoria’s central business district.

WBHO said public sector infrastructure spending has been fasttracked, with many shovel-ready projects accelerated across all of the group’s operations.

It said there has been a noticeable increase in South Africa in the availability of new projects from state-owned entities, including national roads agency Sanral, Eskom, Transnet, passenger rail agency Prasa and Rand Water.

The group said renewable energy projects have also gained momentum under Eskom’s emergency energy round and that bidding in respect of Round 5 is expected to be launched in the second quarter of 2021.

However, WBHO continued to bleed from the troublesome Western Roads Upgrade (WRU) project in Australia in the six months to December 2020, which had a significant negative impact on the group’s financial performance for the period.

WBHO CEO Wolfgang Neff said on Wednesday the group was awarded the project last week and started work on it the next day.

“We have been working on that PPP for 10 years to get it awarded,” he said.

Neff said the group’s road and earthworks division’s forward-looking pipeline in South Africa has improved significantly over the last quarter.

“For example, we have R10 billion of tenders in the office for Sanral and there is R5 billion of projects we have priced that still need to be awarded that we believe we have a reasonable chance of securing,” he said.

Neff said Eskom had released large-scale projects at various power stations and, encouragingly, mining infrastructure opportunities have picked up as commodity prices have recently gained strength.

He said the renewable energy sector also offered opportunities for the group’s road and earthworks division. The group’s project pipeline included R11 billion of renewable energy projects, which is massive.

He said the projects pipeline comprises projects worth about R249.3 billion but these were only projects it believed would be awarded in the next 24 months.

WBHO reported a 11% decline in group revenue to R20.4 billion in the six months to December from R22.9 billion in the previous corresponding period. – Moneyweb