Aveng, the largest construction group in SA, warned on Friday that prevailing tough trading conditions were expected to continue into 2012, with public-private partnerships likely to fast-track infrastructure development.

Aveng, with a market capitalisation of R14,9bn, said SA’s construction environment had continual delays in contract awards, particularly in the public sector.

Operating across Africa, Australasia and the Middle East, the group said a stronger rand should bode well for local infrastructure development given the lower than forecast rand values of importing capital-intensive infrastructure components.

The mining sector remained encouraging, thanks to rising commodity prices and strong demand from China. But, the rand’s strength would negatively affect earnings from its subsidiary Moolmans, the group said.

Within the construction cluster, subsidiary Grinaker-LTA received significant projects in the first quarter — a R211m contract for the Medupi power station in Lephalale ; and a R108m civils contract for the Kgalagadi Manganese sinter plant in Hotazel.

Several contracts were awarded to Australian subsidiary McConnell Dowell — the A 43m Breakwater Road Alignment Project in Victoria, the A 35m Queensland Gas Company, and the A 31m Koniambo Nickel Mine project in New Caledonia.

Aveng said that significant opportunities in Queenland’s coal seam gas sector in the Gladstone area were being targeted.

Moolmans secured several contracts, including the R434m Geita Gold Mine contract in Tanzania and the R363m KCM Rehandle contract in Zambia.

Aveng said tender delays lowered volume in the manufacturing and processing cluster, with lower steel prices and a competitive market putting pressure on margins. Despite stable Trident Steel volumes, motor industry strikes tempered growth of the market.