Posted on 09/02/2003 6:58:20 AM PDT by dead
Johannesburg
THERE are growing indications that US and European companies, as opposed to African companies, will rebuild Africa through the New Partnership for Africa's Development (Nepad).
Murray & Roberts CE Brian Bruce yesterday said it was getting more difficult for the company SA's second-largest construction group to do business in Africa.
"In fact, Africa is going a little backwards," he said at an analysts' presentation.
Bruce was referring to the lack of regulation in many African countries, which raised the risk of undertaking projects on the continent. He excluded southern Africa from his comments.
Bruce said much of the problem in Africa was that aid agencies were reducing their involvement in the projects they funded.
"They are becoming plain funders," he said.
Their absence in the operational aspects of projects removed much of the regulation and security, and increased the risk for construction companies, he said.
As an indication of deteriorating conditions in Africa, Bruce cited the example of a Danish construction company that had been working in partnership with Murray & Roberts on projects in Africa.
" Their current contract with us in west Africa is their last one on the continent," he said.
On roads contracts in particular, Bruce said that construction companies were now being asked to take responsibility for many more issues than in the past.
"We are now looking very carefully at what we're asked to do."
Unless the regulatory environment changed, suggested Bruce, Africa would be a difficult place to make an honest profit.
Meanwhile, Bruce was upbeat about opportunities in southern Africa, saying market conditions could improve in this region over the next year or so, although not significantly.
He said mining projects would be released as soon as there was certainty about South African laws that affected mining. This would have a large effect on construction activity in the country.
There were also increasing opportunities in Australasia and southeast Asia.
"We might as well take on the Australians in construction, if nothing else," said Bruce.
He described the Middle East as a high growth region.
South America could be added to this list , said Bruce, but not at the moment. Murray & Roberts reported solid results earlier this week, with revenue for the year to June hitting R10bn.
In any event, what Africa needs is not infrastructure but social structure.
Hmm, tasty Europeans!
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The Other White Meat?
Tia
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