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Sapphire subsidiary bags contract worth 832m yuan in Chengdu

RANKEN Railway Construction Group Co, Sapphire Corporation’s 97.6 per cent-owned subsidiary, was awarded a contract worth 832 million yuan (S$166.6 million) for engineering, procurement and construction (EPC) works in Chengdu, China by Chengdu Derun Jinlong Environmental Management Co.

This is for the first phase of Wuhou District's Liveable River Bank project in Chengdu.

On Nov 19, 2018, the group had announced that Ranken and its consortium partners have secured a public–private partnership (PPP) project to carry out investment and financing, design, build, operate and transfer works with the Urban and Rural Coordination Work Bureau of Chengdu Wuhou District.

Ranken, being one of the consortium parties, has injected 25 million yuan in cash for a 25 per cent equity interest in the PPP’s project company, Chengdu Derun Jinlong Environmental Management Co.

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The scope of work related to the latest EPC contract includes engineering, procurement and construction works associated with the water environment protection, ecological restoration, flood control measures, building infrastructures and lifestyle amenities of the PPP project. It is expected to take place over two years.

The group said that the EPC contract of 832 million yuan is the largest contract win in recent years.

It expects to benefit financially from three components of this PPP project; first through the EPC contract of 832 million yuan during the two-year construction period; secondly, the potential of recurring dividend income arising from Ranken’s 25 per cent shareholding in CDJ Environmental Management Co; and thirdly, the potential of recurring revenue from the operations management contract of the PPP contract for a 13-year period upon completion of the EPC contract.