PSG wades in to Cape crisis with desalination plans
Subsidiary already at work in Saudi Arabia
Adventurous investment company PSG Group has not had to wait long for its investment in GrahamTek, a desalination and water purification company, to start paying off.
On Tuesday GrahamTek confirmed it had clinched a R5-billion contract to build a desalination plant in Saudi Arabia.
This is the first major deal to be clinched by GrahamTek since PSG’s 53% held subsidiary Energy Partners acquired a controlling stake in the Strand-based water services specialist for an undisclosed sum in October last year.
Energy Partners, a sustainable energy solutions specialist, is one of PSG’s largest unlisted investments held under its PSG Alpha umbrella. Energy Partners – which has grown rapidly in the past five years – has also been tipped for a JSE listing in the medium term.The company said the contract involved designing, building and operating a desalination plant for The Saline Water Conversion Corporation (SWCC).
SWCC controls about 40% of the world’s desalination plants and owns and operates 27 plants in Saudi Arabia that produce more than six billion litres of desalinated water a day.
GrahamTek CEO Julius Steyn said the contract is potentially a global game changer for the company: “SWCC is a market leader and a trend setter. If SWCC go for our technology it will open doors in other markets for us.”
GrahamTek is already engaged with contracts in India and Ghana.
Steyn stressed the contract consists of several phases. “We need to achieve every milestone, and deliver 100% to the contract requirements. On completion it will generate in excess of R5-billion in foreign revenue for South Africa.”
He said work will commence immediately on phase one with a view to complete the entire contract over the next 18 months. Steyn said Saudi Arabia is investing ahead of the future demand caused by population growth as well as an increase in urbanisation.
He said the prolonged low oil prices forced Saudi Arabia to consider technologies providing desalinated water at the most cost-effective prices.
Steyn believed GrahamTek will complete the entire contract over the next 18 months in conjunction with a consortium of major international engineering firms.
The company has experience in the region with the new desalination plant being the sixth contract that GrahamTek has secured in Saudi Arabia.
As regards winning desalination plant contracts in drought-stricken Cape Town, Steyn said GrahamTek was part of the city’s ongoing efforts at securing alternative water sources. “The adjudication process is underway … we’ll have to see.”
He contended that GrahamTek’s technology is ideally suited for the South African environment and is well placed to provide solutions for the Cape Town water crisis.