published on 12/08/08
Consulting engineering company Group Five has announced the awarding of two multi-billion-rand joint-venture road contracts for the South African National Roads Agency Limited (Sanral).
The total value of the two contacts is reported to be about R3,5-billion, spread over three years. Group Five’s share as the lead contractor will be about half of the total value.
The contracts form part of Sanral’s seven contracts for the first phase of the Gauteng Freeway Improvement Project (GFIP), amounting to a total of R11,5-billion. The work is programmed for completion ahead of the 2010 World Cup.
Group Five’s contracts comprise lane additions and improvements to interchanges on the N1 freeway between the Soweto and the 14th avenue offramps, and the N3N12/N17 freeway complex including the Reading and Elands inter-changes.
Group Five CEO Mike Upton says, “These contracts are in line with the company’s stated strategy of focusing on larger, higher-margin South African infrastructure contracts with longer lead times. “Importantly, they are in close proximity to our con-struction materials quarries, which will allow for the efficient delivery of materials. “As Group Five promised the market, the company invested in its own supply chain last year through the acquisition of raw materials producers, Quarry Cats and Sky Sands, exactly for these kinds of contracts.”
The contracts will involve the company’s roads and civil engineering teams, proving Group Five’s ability to offer integrated services to larger contracts and clients.
Upton adds that the contracts were particularly attractive to Group Five as they require heavy civils and road disciplines. The contracts follow on from the group’s recently awarded road contracts, such as the Koeberg interchange, in Cape Town, and the N17, in Gauteng, with a total value of about R1-billion.
“The company has steadily started to position its roads team for the upcoming infrastructure work to ensure it has the correct resources, risk management and delivery systems in place. “The company, therefore, has sufficient resources in place to deliver on all of its broader R14-billion Group Five order book over the next few years,” says Upton.
In line with Sanral’s request for a combination of large, medium and smaller contractors on GFIP contracts, Group Five’s joint-venture partners include construction companies Power Construction, Liviero, Bophelong and Umso. The group has partnered with some of these companies on past projects.
Meanwhile, the company is continuing to expand its business interests in the United Arab Emirates.
Group Five’s engineering cluster, consisting of Engineering Projects and Group Five Energy, has seen consider- able growth in Dubai over the last year and forecasts indicate that this growth will be maintained for the foreseeable future.
Upton reports that with the special focus on power now clearly established in Energy, it is equally important to drive the expanded opportunities Group Five wants to see across the group in the African and Middle East region in mining and industrial markets.
“The company believes it is important to strengthen its position in chosen international markets where it can widen group involvement through existing relationships in the mining and industrial markets where the Group Five engineering cluster and civil engineering already has experience,” says Upton.
He adds that this will also ensure that the company balances its business and resources to meet the growing demand in Africa, while mining and industrial projects in South Africa might slow down over the next few years as Eskom builds additional generating capacity.


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