JOHANNESBURG (miningweekly.com) – The project pipeline of JSE-listed project house TWP has been cut down to R100-billion, says TWP Holdings CEO Nigel Townshend.

Townshend tells Mining Weekly Online that some R20-billion worth of projects have been cancelled and another R20-billion delayed.

The cash-generative and debt-free company's project pipeline once stood at R140-billion, but Townshend reports that about R20-billion of those projects are unlikely to make it back on to the market in the next two to three years.

"We've also had projects delayed and the length of delay is dependent on the improvement in the economic cycle," Townshend says.

But that still leaves the company with a substantial R100-billion worth of projects on its books.

"We've seen particular drop-off in process plant projects. Our mining projects are far more robust and our clients are looking through the current cycle because the projects tend to be five years, eight years and even longer away.

"The process plants are relatively easy to turn off and bring in a direct immediate saving to our clients and can be turned back on again fairly quickly.

TWP's employee complement has consequently declined from a peak of 1 850 to 1 700 currently.

"We have been very badly affected by the situation in Western Australia. We have lost 100 staff in the last three months in Perth, and we are probably looking at another round of retrenchments in the next few months, up until the middle of the year, after which, if the economic climate stays as it is without getting better, we will probably have reached the limit of our retrenchments," Townshend adds.

But TWP is managing two fair-sized platinum projects that are working their way to site in South Africa, which include the Styldrift platinum project, a joint venture between Anglo Platinum and Royal Bafokeng Holdings, and the Frischgewaagd-Ledig project, Wesizwe's platinum venture on which construction is to begin shortly.  These two projects are in addition to Impala Platinum's  20 shaft and 17 shaft projects and Anlgo Platinum's PK2, already in execution.

"There is no doubt that the situation is grim and certainly the sentiment has changed dramatically, but it's not all gloom and doom," says Townshend.

Moreover, TWP Investments has become involved in bringing in-house TWP projects to fruition, which is providing self-generated work for the project company.

An example of this is the submission of three independent power producer (IPP) bids to Eskom (see also Engineering News Online for details of the IPP submission), through its new TWP Energy division, which forms part of TWP Projects along with TWP Mining Projects division, headed by TWP Projects CEO Digby Glover.

"There is still money out there for good projects, which have a sound business case," Townshend reports.

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