Chinese consortium ‘best for the job’
Carli Lourens
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STEEL maker Ispat Iscor has defended its decision to award the main contract of a R450m project to a Chinese consortium, following concerns raised by the local construction industry.
Sources in the local industry said the South African Federation of Civil Engineering Contractors had lodged a complaint with the trade and industry department, but the federation would neither confirm nor deny this.
Sources were particularly concerned by the fact that several hundred Chinese workers would be brought here to fulfil the contract.
Two of SA’s largest construction firms, Aveng’s Grinaker-LTA and Murray & Roberts, were among those that had tendered for the contract.
Ispat Iscor yesterday said it awarded the contract for the construction of a coke oven battery and gas plant at the steel maker’s Newcastle plant to Chinese industrial consortium CITIC-ACRE “as it offered the best technological and financial solution for the project”.
In addition, Ispat Iscor said the specialist knowledge, material and labour construction skills required to build a coke oven battery were not available locally. SA’s last coke oven battery was built more than 25 years ago by a German firm, it said.
A commentator who asked not to be named said that even if domestic companies did not have certain skills, Iscor Ispat could have subcontracted some of the work. He said it would have been nonsensical for local construction firms to tender for the contract if they felt they could not do the job.
Ispat Iscor said that an average of 90 foreigners would work on the project on a rotating basis during the 20-month construction phase.
Petrochemicals group Sasol also recently said it would have to import about 2000 qualified artisans, mainly from Asian countries, due to shortages in the domestic market.
Ispat Iscor said the Chinese consortium had a proven track record of building and operating coke oven batteries. This record was a key factor it had considered when awarding the contract.
The company said Chinese construction companies had built about 90% of all recently constructed coke oven batteries worldwide and had significant current experience. They were especially skilled in delivering modern, environmentally friendly technologies, the steel maker said.
The company said that about 34% of the coke oven battery and associated gas plant work would be undertaken by South African companies, with contracts worth about R150m.
This will entail demolition activities, civil construction, installation of pipe work for the gas plant, material handling systems, electrical instrumentation and automation systems and the construction of ancillary plants, such as the biowater and reverse osmosis plants.
The project would see Ispat Iscor doubling its sales to the country’s ferroalloy industry, which consumes 1-million tons of coke a year, and lead to it replacing coke imports, sourced mainly from China, it said.
The steel maker currently produces about 400000 tons of coke a year at its Pretoria and Vereeniging works.
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