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Murray & Roberts creates projects division
November 17, 2009
By Roy Cokayne
Murray & Roberts (M&R) has merged its engineering solutions and mechanical, engineering and instrumentation operations to create a large scale engineering, procurement and construction contractor to serve four key markets in the Southern African Development Community (SADC) region.
Called M&R Projects, it will focus on the power, oil and gas, mining and minerals and water desalination, supply and treatment markets of SADC.
Gary Wells, managing director of M&R projects, said on Monday that it was established effective from July 1 this year with the Medupi and Kusile power stations as the backbone of its current business.
The new entity will be the engineering, procurement and construction (EPC) projects implementer of the M&R group and be involved in projects from the concept phase onwards.
Sean Flanagan, M&R SADC cluster executive, said the power station projects accounted for R8.7 billion of M&R’s total group order book of R40 billion.
Flanagan said it had been appointed the preferred bidder on several general industrial projects that should be finalised in the next couple of months but declined to name these contracts.
He said the motivation for the merger was that the market had shifted and M&R was responding to this shift.
Flanagan added that with the public sector as M&R’s client, its provision of both engineering and construction services was regarded as a “conflict of interests” although this was not a problem in the private sector.
Rather than engineering major industrial contracts and managing the process of putting the project packages out to market to build, M&R would now engineer and build these projects, he said.
Wells added that through its ability to break a project down and influence the direction of a project in the design phase, M&R Projects would be able to ensure its constructability in the South African environment.
He said there was insufficient capacity in South Africa to manage large industrial projects and, through this initiative, M&R was also trying to build capacity internally so it could deliver these projects on behalf of the government without resources and skills continually having to be imported from overseas.
But Flanagan stressed clients would have their own technological partners and M&R did not have any intention of getting involved in that space.
Flanagan said there were a lot more issues that needed to be understood in the South African environment to ensure the constructability of a project, such as industrial relations and labour issues, training and development and empowerment.
He said these issues within big projects were extremely significant and had already contributed to major strikes on projects.
“With more thought up front, maybe they could have been avoided,” he said.
Flanagan said most major industrial projects were in fairly remote areas and there were expectations from the people in the area of how they would benefit from this significant investment.
However, Flanagan said many of the people in these areas did not have skills and there was a need to go into the area well ahead of the project commencing to recruit people who could serve that project.
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