Blowing away the competition
The young subsidiary of a 60-year-old South African engineering giant, Basil Read Matomo is delivering its first major EPC contract for a wind farm near Port Elizabeth.
South African companies don’t get much bigger than construction, development, engineering and mining group Basil Read (JSE: BSR). Since its founding in 1952, Basil Read has branched into multiple sectors, sprouted many subsidiaries and topped South African Sunday Times’ Top 100 Companies Survey twice. The company’s short-term goal – to become an R10 billion-turnover global construction group – should tell you how far it has already come.
Basil Read Matomo is the group’s process and energy design and project execution company, within which the power generation division resides. Matomo’s energy division specialises in delivering EPC (Engineering, Procurement and Contracting) turnkey delivery of power generation projects. The division was created around two years ago and put under the management of Energy Director Marius von Wielligh.
He describes how, while Basil Read’s main construction division works on projects including coal-fired power stations such as Medupi and Kusile (also in South Africa), Matomo’s energy division focuses predominantly on renewable power-generation projects. “We focus largely on the wind and solar side of things – mostly aligned with government’s renewable energy programme for South African projects,” he explains.
“We have projects in the pipeline for hydropower, as well as co-generation. Most significantly, we just started building our first wind farm, for which we’ve been contracted on an EPC turnkey basis to design and construct.”
Van Stadens Wind Farm
The 27MW Van Stadens Wind Farm, around 30km outside Port Elizabeth on South Africa’s Eastern Cape, was one of the first projects to come to fruition through the Department of Energy’s REIPPP (Renewable Energy Independent Power Producers Programme). The project was entered into Round 1 of the REIPPP in November 2011 and received the go-ahead a year later. Matomo began work on the site just two weeks after receiving the notice to proceed, making it the first REIPPP project to get underway.
“We’re now well advanced in terms of the construction of it; all our foundation civil works and construction have been completed, and all our turbines have arrived in South Africa, so we’re busy transporting them to the site,” says von Wielligh.
“Contractually, we have to start up on 1 February 2014; we’re planning towards an end-of-December commissioning on our side. At this point, we’re transporting the turbine components to site so that we can commence with erection of the turbines in August, followed closely by our transmission line.”
Like most wind farm projects, Van Stadens initially held many challenges for Matomo – one was the cultural and linguistic differences between itself and the Chinese wind turbine supplier, Sinovel. However, von Wielligh believes the two companies have overcome this barrier. “We’ve managed to get a very good relationship going with Sinovel, and to negotiate a very good turbine supply agreement,” he says.
As Matomo’s first energy EPC project, the Van Stadens Wind Farm is very significant for the company; but it is also very significant for the local area. It has created business for a number of local contractors, and jobs for many local people.
“The majority of our contractors are local; for example, our civil contract is with Newport Construction, a local company from Port Elizabeth,” comments von Wielligh. “Our contractors are able to use their own employees, as well as recruit from other areas close to the wind farm.”
In addition, the Van Stadens project’s developers have created a local community trust that will ensure the community continues to benefit from the proceeds of the wind farm.
A less expected benefit came directly from Matomo, who invested in providing solar-powered lighting for a nearby village. “For the first time, there were lights available to the community during the night,” says von Wielligh. “We are very proud of providing that.”
The Matomo difference
This contribution is one example of how Matomo goes the extra mile to provide high-quality service. It delivers this through drawing upon an experienced team and a strong network.
“We pull the Matomo team in from various sectors to create a team with relevant experience for the energy projects to embark upon,” comments von Wielligh. “It’s also important for us to build very good relationships in the market, and our core team has a very good network of industry relationships.”
Another important quality of Matomo is its ability to assess risk in the development of power generation projects. Von Wielligh goes as far as to say that risk management is “part of the DNA” of Matomo. “We’re very risk-aware, so have various methodologies when we start to look at projects for identifying the risk areas, and we have appropriate risk-mitigating strategies in place for those.”
However, von Wielligh claims the main point of difference between Matomo and its competitors is its “partnership approach”. He says the company has an “open book policy” and is always “transparent” when discussing costing structures with its clients. “We believe that gives us a very agile business approach, because we’ll negotiate with the client and form a way forward to match their requirements,” he adds.
At this point in time, Matomo is busy with several proposals – for wind, solar and hydro – being entered into Round 3 of the REIPPP, whose bidding process closes on 19 August. Meanwhile, Matomo is at the negotiation stage of another solar PV project, which it hopes will come to a close soon, all while finishing the EPC for the successful Round 1 project of Van Stadens Wind Farm.
Von Wielligh says Matomo will expand as its pipeline grows, which seems highly likely while South Africa continues to embrace renewable energy. The country aims to achieve an energy mix, taking advantage of the current average Round 2 prices for wind (90 South African cents per kWh) and solar PV (1.65 rand per kWh) to grow the share of its energy derived from renewable sources. It makes sense, given the country’s abundant supply of sunshine and wind. Furthermore, the development of wind farms and solar PV plants is creating jobs and boosting secondary industries, meaning South Africa stands to benefit from renewable energy in many ways.
Through turning clients’ ideas into successful projects, Matomo is helping to revolutionise South Africa’s energy sector and fast becoming one of Africa’s top-tier EPC companies.