Construction major Wilson Bayly Holmes-Ovcon (WBHO) continues to deny that it was involved in collusive tendering regarding the construction of the 2010 FIFA Football World Cup stadia, stating in a business update on Thursday that it is firmly of the view that its conduct did not constitute a contravention of the Competition Act.

On this basis, the group refused to settle the complaint as part of the earlier Fast Track Settlement Process and the case was referred to the Competition Commission.

However, the commission on Wednesday found that the company – along with counterparts Group Five Construction, Murray & Roberts, Stefanutti Stocks Holdings and Basil Read – had participated in collusion when bidding for tenders, referring the case to the Competition Tribunal.

“WBHO will deal fully with the allegations contained in the referral at the tribunal hearing and is confident that it will be able to refute all of the allegations made by the commission at the hearing of the matter,” the company noted.

BUILDING AND CIVIL ENGINEERING
WBHO, meanwhile, outlined on Thursday that activity in the local building markets remained “healthy”, with 6% growth in the division’s order book between June 30 and September 30.

Growth remains localised in Gauteng and KwaZulu-Natal, although conditions in the Eastern Cape had improved and the building and engineering division had secured two new contracts at the Coega industrial development zone.

In Gauteng, the division secured contracts to build new offices for medical aid provider Discovery, in Sandton, and property group Abland, in Rosebank, while, in KwaZulu-Natal, contracts for the construction of two new office blocks had also been secured.

“Internationally, the West Hills mall contract, in Ghana, was successfully handed over in October. The division is currently constructing another two retail projects in Ghana and the division is in advanced negotiations for new projects in Ghana and Mozambique,” said the company.

All current building projects were progressing “well” and margins were expected to remain broadly in line with levels reported on in June.

Activity in the mining sector, however, had shown little sign of improvement and continued to impact the civil engineering division.

“No new contracts have been secured since June and the number of ‘real’ projects on which to bid remains low,” WBHO noted.

ROADS AND EARTHWORKS
Meanwhile, the order book of the group’s roads and earthworks division declined by 16% over the first quarter.

While no significant projects had been secured in the quarter under review, the group believed positive scope variations on existing projects and a number of smaller project awards had maintained the order book at “reasonable” levels.

Production at the North-South carrier pipeline, where the division experienced delays in the prior year, had reached the required levels to complete the contract within the specified dates.

“Mining-related projects across all the division’s African operations remain scarce, although some opportunities in West Africa are being pursued.

“Construction of the gas-fired power station in Mozambique on behalf of the group’s projects team has begun; however, other opportunities in respect of the gasfields in Mozambique are only expected to occur toward the end of next year,” the company said.

The overall performance of the division over the quarter had been in line with expectations, but the margin pressure reported on in June persisted.

AUSTRALIAN BUSINESS 
In Australia, market conditions remained similar to what was previously reported, with the building markets maintaining “reasonable” activity levels and the mining sector remaining subdued.

“The increase in the order book is predominantly currency related and the performance of the building divisions in Australia continues in line with expectations,” WBHO outlined.

The group’s civil engineering companies Probuild Civil and WBHO Civil were both experiencing difficulties in the execution and completion of two projects, which was likely to result in lower profitability from these businesses in the 2015 financial year, the company cautioned.

CONSTRUCTION MATERIALS 
It added that the continuing operations within Capital Africa Steel (CSS) had performed “satisfactorily” over the first quarter, although the markets remained challenging.

Moreover, the sale agreement in respect of Dywidag Systems International was concluded following Competition Commission approval of the transaction.

In addition, the competitive bid process for the sale of CSS was progressing, with the 11 interested parties expected to submit their acquisition proposals by the middle of December, at which time all project work in the factory was also scheduled for completion.