Roy Cokayne
MURRAY & Roberts (M&R) has reached agreement to sell its wholly owned Tolcon subsidiary, which operates various toll road and rail concessions throughout South Africa and investments in selected concession companies, including the Gautrain rapid rail system, to an unidentified buyer.
The value of the transaction was also not disclosed.
M&R said this agreement supported the group’s focus on its core capabilities of engineering and construction but was still subject to Competition Commission and other approvals. “Stakeholders will be updated on the outcome of the transaction in due course.”
The Tolcon Group of companies was established in 1985. M&R’s website describes it as one of the leading transport infrastructure companies in the country. Its operating companies include Tolcon Lehumo, Toll Road Concessionaires, Cape Point Partnership, Entilini Operations, Tuncor Services, Bombela Operating Company (BOC), and Pt Operational Services.
Tolcon is a shareholder in the BOC, which has been contracted by the Bombela Concession Company to deliver the operations and maintenance of the Gautrain. The 20-year permit was to design, build, part-finance, operate and maintain this 80km project.
Duties of the BOC include operating the Gautrain and bus-feeder system and facilities management. It is also responsible for the management of the 10 stations. The maintenance contract includes lifts and escalators, ventilation, cleaning, track maintenance, bridges, electrical and mechanical equipment, fare collection equipment, signalling systems and security.
Through its various operating companies, Tolcon is also responsible for the tolling operations and maintenance of the Bakwena N1N4 Toll Road from Pretoria to Bela-Bela; the operation and maintenance of the N3 Toll Road; the N1 Great North Toll Road; N17 Toll Road; Oribi Toll Plaza and N2 South Toll Road; the Mariannhill Toll Plaza; the Huguenot Tunnel; and the reconstruction and operation under a public-private partnership (PPP) concession of Chapman’s Peak Drive.
It has a strong relationship with the SA National Roads Agency Limited (Sanral), which it partners on road projects.
Tolcon forms part of M&R’s PPP Investments & Services in M&R’s Construction Africa and Middle East segment and its financial results are not disclosed separately from this segment.
M&R said the agreement with the unidentified proposed buyer did not result in a categorised transaction in terms of the JSE listings requirements. A transaction is categorised by assessing its size relative to that of the listed company.
Stephen Meintjes, an analyst at Imara SP Reid, said he was not surprised by M&R’s announcement, adding Tolcon “never really registered on the radar and I can’t recall what it contributed to the group”. He added: “M&R is so big and Tolcon is not a big contributor in the bigger scheme of things and will not help the group to either win or lose contracts.”
Meintjes suggested that there was a possibility Group Five might be the unidentified buyer because it also had a concessions business.
Attempts to obtain comment from Group Five were unsuccessful.