Civil engineering and construction group Sanyati Holdings said on Tuesday that it was beginning to see tangible benefits for its geographical diversification strategy as the group entered into final negotiations in Uganda for a R720 million roads project.

Speaking at a press function in Sandton, Johannesburg, Sanyati CEO Malcolm Lobban said: "We remain focused on building and converting the pipeline of opportunities in our chosen markets within SA.

"Our strategy of geographical diversification is, however, beginning to gain momentum.

"We are pleased to advise that we have entered into final negotiations in Uganda regarding a significant roads project."

Lobban said that the opportunity had been identified 12 months ago after the Ugandan Roads Authority had notified of its intention to invest in the upgrade of nine roads across the country.

"We decided early in the process that it would be prudent to secure a partnership with another experienced road building contractor to pursue this venture," Lobban said.

Sanyati said it had teamed up with JSE-listed road construction group Raubex as a joint venture partner for the R720 million project.

"We are also waiting for the outcome of the adjudication on a second roads project of a similar scope and value on which we also tendered in joint venture with Raubex," Lobban stated.

"We are optimistic that we can close the deal," he said.

The CE pointed to additional positive progress outside of SA, including the "strong likelihood" of fibreoptic work in Botswana and Zambia, a design, construct and finance solution for the Lesotho government, and the "possibility" of a roads project in Zambia at a collective value of R450 million.

The group also highlighted its ambition in the water sector, underpinned by its 27% interest in Africa Pipe Industries, a manufacturer of spiral welded steel pipe "It's a known fact that water is expected to be a major growth sector," Lobban said.

He said that, historically, work in SA accounted for 90% of the group's total operations, however "if all the current work comes off", he expected cross-border work to account for 30% of total operations.

Sanyati was embroiled in a complex tender process for the construction of the second phase of eThekwini Water and Sanitation's R950 million western aqueduct project, which has been delayed by the eThekwini municipality.

The western aqueduct project is a bulk water supply project commissioned by eThekwini Water and Sanitation.

The project was put under the spotlight after a number of tendering parties voiced their objections against the decision by eThekwini municipality to award to the EsorFranki/Cycad Construction joint venture the construction of the second phase.

Lobban said that Sanyati had been the lowest bidder for the project.

"We expect the outcome of this process within a matter of days," he said.

Source: I-Net Bridge

Publisher: I-Net Bridge
Source: I-Net Bridge