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South Africa: Infrastructure Boom Swells M&R Order Book
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Business Day (Johannesburg)
15 May 2008
Posted to the web 15 May 2008
Bheki Mpofu
Johannesburg
CONSTRUCTION and engineering group Murray & Roberts said yesterday that its project order book had risen to R44bn at the end of March as investment in infrastructure grew globally.
This was 16% up on the third quarter and almost 100% up over the nine months since June as the group continued to take advantage of the worldwide boom in infrastructure spending.
CEO Brian Bruce said the group had landed contracts in SA and the Southern African Development Community (SADC) region as well as in the Middle East and Australia.
Bruce said in its half-year period, the bulk of the order book (about 53%) consisted of projects in SA and the SADC region, 26% from Australia, 13% from the Middle East and 8% from North America.
The group said it had favourably renegotiated the terms of its contract for the continuation of underground development and mining at Aquarius Platinum's Kroondal mine.
Together with its partners in the Middle East, Murray & Roberts (MUR) had been awarded a R2,2bn contract to design and build a campus for the Sorbonne University at Al Reem Island in Abu Dhabi.
Negotiations were also in progress for the award of a contract worth about R13,3bn to build the iconic Tameer Towers high-rise project.
In Dubai, Murray & Roberts said that, with its partner Habtoor, it continued negotiations to construct the R11bn Dubai Airport Concourse 3 project . The two companies had also been awarded preferred contractor status for the Coral Island resort development, the first major project on The World, valued at about R8,8bn.
In Australia, Murray & Roberts subsidiary Clough announced last month that it had been awarded the Apache Devil's Creek development project on the northwest shelf valued at R1,8bn.
Bruce said the company's growth had put it in a good position to win bigger projects. "We are three to four times bigger than we were about three years ago because of acquisitions and organic growth. The size of the company means we can now access much bigger projects than before.
"We consume about R20bn of that order book each year, so we have to constantly look for new projects, " he said.
Bruce said that since March, the group had been awarded a number of additional contracts. These include a R3bn civil works contract for Eskom's Medupi power station near Lephalale, Limpopo, the first coal-fired power plant to be built in SA in 20 years.
Many of the new contracts extended beyond 2010, the company said.
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The announcement saw the group's share price rise R5,40 or 3,5% to R87,90.
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