WBHO agrees to mentor firms in settlement pact
Wilson Bayly Holmes-Ovcon (WBHO) will mentor three emerging contractors within its South African construction business as part of a settlement agreement between the government and seven JSE-listed construction groups.
It will ensure the parties — Fikile Construction, Motheo Construction and Edwin Construction — acquire skills and the volume of work needed to generate a combined annual turnover of at least 25% of WBHO’s yearly South African civil engineering and building revenue within seven years.
WBHO CEO Louwtjie Nel said on Tuesday the group felt it was an effective option to help black construction businesses to grow substantially.
This comes after Aveng, SA’s largest construction and engineering group by turnover, agreed to sell a 51% stake in subsidiary Aveng Grinaker-LTA to Kutana Construction, a black women-owned group, as part of the settlement agreement. Meanwhile, Murray & Roberts has sold its Southern African infrastructure and building businesses to a wholly black-owned and managed South African industrial holding company, the Southern Palace Group.
Mish-al Emeran, an equity analyst at Electus Fund Managers, said on Tuesday the outcomes of the settlement agreement with the government had been "decidedly uncertain".
"The issues surrounding transformation in the construction sector and unresolved claims for damages from competition authorities has [damped] the mood, confidence and sentiment in the sector for all stakeholders," he said. The announcement did reduce some uncertainty, "making it … easier to … shape expectations for the future of the industry".