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Australia's Cimic gives Auckland rail the glad eye

Thursday 7th February 2019

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Australian construction firm Cimic Group has Auckland's rail network firmly in its sights, touting two projects in a list where it's been short-listed or is currently bidding. 

The company, formerly Leighton Holdings, has identified a pipeline of at least A$130 billion of tenders to be awarded or bid for in 2019 and a further A$300 billion beyond that, of which A$120 billion is via public-private partnerships. It's currently bidding or has been short-listed on 16 projects, including the Auckland light rail stage one main works for the New Zealand Transport Agency and Auckland's City Rail Link C3 stations and tunnels for Auckland Transport. 

Cimic's CPB Contractors is a member of a consortium with UGL, Beca, McMillen Jacobs, and Jacobs New Zealand short-listed for the C3 project.

Meanwhile, the Auckland light rail project started sounding out the market for a preferred procurement model in the final quarter of 2018, with a view to start construction next year. It has already attracted an unsolicited bid from the New Zealand Superannuation Fund and Canadian fund manager CDPQ Infra.

Cimic yesterday reported a net profit of A$780.6 million in calendar 2018, up from A$702.1 million a year earlier, on a 9.2 percent increase in revenue to A$14.67 billion. The company is ultimately controlled by Spain's Actividades de Construcción y Servicios. 

Several New Zealand projects were name-checked as contributing to those results, including the construction of Christchurch Hospital, the Transmission Gully public-private partnership, and another Kiwi PPP to build three primary schools. Upcoming work includes the A$687 million contract to design and build Waikeria prison. 

Cimic sees the New Zealand government's plans to spend NZ$42 billion during the next five years as offering a range of construction opportunities that suit the company. The pursuit of PPPs is also an area Cimic identified as an opportunity. 

The government's six-month financial statements released today show the Crown's capital commitments totalled $13.64 billion as at Dec. 31, of which $4.1 billion was for state highways, and another $4.44 billion was for land and buildings. The Crown spent $4.56 billion buying physical assets in the half, up from $3.66 billion a year earlier, and about $101 million below forecast. Treasury projects the net purchase of physical assets to total $10.67 billion in the June 2019 year. 

Cimic shares rose 3.3 percent to A$48.29 today. They are about 4 percent higher than a year ago, well above their A$39.575 12 month low.


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