CONSTRUCTION group Concor is negotiating a black economic empowerment deal, chairman Fritz Keller announced in the company's latest annual report.
The move was designed to preserve the group's ability to secure contracts from the mining sector.
Concor has also announced it was pulling out of a consortium bidding for the Gautrain mass transit project.
"The group is reviewing its position with respect to black economic empowerment and is committed to introduce an equity partner at group level," Keller wrote.
"In the interim, the operating divisions will continue to play a key role in developing emerging black business through partnerships and joint ventures."
Concor CE John Willmott wrote: "The group is actively engaged in attracting a suitable empowerment partner and, when secured, will allow the group to fully support our mining clients in terms of the mining charter and fulfil our obligations as a responsible corporate citizen."
Willmott could not be drawn on the name of the prospective empowerment partner or consortium. He did say however, that a partner had been identified and that a "meaningful" shareholding was on the table.
An analyst, who asked not to be named, said that the challenge facing Concor would be to find a black economic empowerment partner who can add value to the business, and to avoid tokenism.
"You can't get enough engineers in SA full stop, let alone black ones," he said.
"The biggest problem is the complete lack of appropriate skills in potential black economic empowerment partners.
"Any empowerment deal requires a great deal of hand holding," he said.
However, the analyst said Concor needed to adopt an appropriate empowerment profile as it was restricted in its geographical expansion because it was a subsidiary of German construction group Hochtief.
"Concor is Hochtief's exposure in southern Africa, so Concor itself has no scope outside the region, other than through joint ventures with Hochtief.
"That is why it is more pressing for Concor to conclude an empowerment deal than it would be for other construction firms such as Murray & Roberts or Aveng."
"I would expect the empowerment deal will be with a consortium. These structures tend to hide the funding, as the company often needs to cross-subsidise the empowerment partner."
On the Gautrain project Willmott said: "Concor decided to withdraw from the Gautrain bidding process and will endeavour to participate as a subcontractor should the project proceed."
Asked for further comment on Friday, Willmott said: "The job looked too big for us."
There had at one stage in the bidding process been an opportunity to reconfirm or withdraw from taking part in the project "and we elected not to proceed with it", he said.
Willmott said that the move should not be interpreted as a lack of faith in the new Gautrain rail project.
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