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MUR
MUR
MUR - Murray & Roberts Holdings - The South African Power Situation
MURRAY & ROBERTS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1948/029826/06
JSE Share Code: MUR
ISIN Code: ZAE000073441
("Murray & Roberts" or "Group")
THE SOUTH AFRICAN POWER SITUATION
Approximately two thirds of Murray & Roberts business activity occurs within
South Africa, which has been subjected to an irregular and unscheduled spate of
electricity shedding by state power utility Eskom since mid-January 2008.
Although disruptive on most of the Group`s domestic operations, public
statements by Eskom and the South African government gave confidence that some
level of normality would return with a proper power management plan and the
return to service of significant capacity currently undergoing scheduled and
unscheduled maintenance.
However, the electricity supply problem reached a crisis on Friday 25 January
2008 following which most of the Group`s underground mining contracting
operations were suspended for safety reasons and electricity supply to the
Group`s CISCO plant in Western Cape was suspended for an estimated 3 to 4 weeks.
The national electricity supply system has stabilised at a lower level of demand
with less evidence of load shedding and the Group`s remaining domestic
operations are currently operating normally.
The Group`s South African underground mining operations have currently resumed
at about two thirds of capacity. The Group has resolved to pursue its contracted
rights to recover to the extent possible in all its South African businesses,
the cost and time impact it has or will suffer as a consequence of the current
electricity supply problems being experienced.
The Group has mobilised standby generation capacity to many of its project sites
and most of its business units had installed such capacity following previous
power outages. There are ongoing discussions with clients and Eskom concerning
the guarantee of an uninterrupted supply of electricity to those projects
dedicated to the 2010 Soccer World Cup.
Eskom has stated that the current crisis requires between three and four weeks
to resolve. Unless otherwise indicated an update will be given by the Group on
Wednesday 27 February 2008 on publication of its interim half-year results for
the period to 31 December 2007.
Murray & Roberts has secured the construction contract to Hitachi for both the
Medupi and Bravo boiler contracts (12 units of 750MW) collectively valued at
about R15 billion. The Group is also a contender for the Medupi civil
construction contract (about R2,5 billion) and the Ingula pumped storage
underground construction contract (about R6,5 billion) plus associated works
(about R1,0 billion), all of which are currently under adjudication by Eskom.
The Group in partnership with Westinghouse and Shaw Group from the United States
will submit a proposal for a first nuclear power plant and fleet option on 31
January 2008.
Johannesburg
28 January 2008
Sponsor:
Merrill Lynch South Africa (Pty) Ltd
Date: 28/01/2008 16:08:37 Produced by the JSE SENS Department.
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