Future looks brighter as Basil Read counts on winning PPPs

Basil Read, the listed construction group, has placed a lot of hope in public-private partnerships (PPPs) for its future workload, with projects worth more than R30 billion in progress and awaiting finalisation. Basil Read chief executive Marius Heyns said yesterday it was clear the South African government intended to "push PPPs because it relieves the pressure on the government to roll out these projects".

"There is a lot of pressure on the infrastructure and government is fast-tracking through the Treasury with PPPs."

Heyns said PPPs in progress included two toll roads - one in Cape Town and the other in Abu Dhabi - worth a total of about R10bn; four prisons in South Africa worth a total of about R6bn; two office blocks in Pretoria to the tune of about R3bn; and the University of Botswana worth about R7bn.

A PPP estimated to be worth between R5bn and R7bn for Chris Hani Baragwanath Hospital was also expected to come out in March.

Heyns said the group spent about R6 million in preparing a bid for a PPP project and about two years ago had set up one floor at its head office with 20 to 30 people who worked only on PPP proposals.

"We're very sell set up in that field and even if we only get one project it will be worth more than R1bn. It was 'plan B' if tenders did not come out."

However, he admitted delays in finalising PPPs were frustrating. Requests for proposals for PPP projects normally did not come out until they had been approved by the Treasury.

He said one of the office blocks in Pretoria involved the rebuilding of Munitoria, the head office of the Tshwane metro council. Munitoria was partly destroyed by a fire several years ago.

Heyns said this project had been delayed by the suspension on four different occasions of Tshwane's municipal manager.

The Tshwane metro indicated it would make a decision on this project before the end of this month, but it now looked unlikely this would happen.

Bids for the four private prisons had to be submitted by July this year, but there were reports that Correctional Services Minister Nosiviwe Mapisa-Nqakula wanted to stop these projects. The reports were later denied, said Heyns.

However, he admitted there was controversy about the privatisation of prisons.

He said a single successful bid would cover the cost of what the group spent on PPPs, which was why it was putting a lot of store in such projects.

Basil Read fell 0.69 percent to R14.30 on the JSE yesterday .

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