06 September 2007 | Antony Barton
Steel producer ArcelorMittal South Africa is reviewing its use of foreign and local contractors after a poor performance by mostly domestic firms at its Vanderbijlpark mill in southern Gauteng.
CEO Rick Reato said a furnace relining contract, which was completed in July after 145 days rather than the expected 95, was plagued by bad workmanship and unacceptable staff turnover. The total cost was also 10 per cent more than the original budget of R578 million (£40 million).
According to Engineering News
, Reato admitted that while the firm's R470 million (£32 million) coke-oven project, part of which was let to a Chinese project management firm, may have been too extreme in its use of foreign contractors, it met the budget and schedule. He said: "By contrast, our 'Proudly South African' effort at Vanderbijl experienced a number of problems."
The company is monitoring its R600 million (£41.5 million) direct reduction iron-ore kilns project, where the contractors are both foreign and local, but says it is too early to gauge if the mix is working. It began at the end of March and is expected to finish around the middle of next year.