Sembcorp, Hock Lian Seng clinch Changi Airport deal
Singapore
SEMBCORP Industries has entered into a joint venture with civil engineering firm Hock Lian Seng Infrastructure to take on work from Changi Airport involving the extension of a third runway.
Hock Lian Seng, a mainboard-listed firm, will hold a 60 per cent stake in the joint venture, and Sembcorp's wholly owned subsidiary Sembcorp Design and Construction the remaining stake.
The joint venture has been awarded the S$1.107 billion contract from Changi Airport Group to carry out development work for the three-runway operations, both said in exchange filings on Monday evening.
This includes work around the airport's second runway, as well as taxiway pavement works, drainage, mechanical and electrical works, security fencing, perimeter roads, ancillary buildings as well as other supporting work.
The contract is the second package of works relating to the development of a three-runway system, and saw the participation of four bids in a competitive tender, said Changi Airport Group (CAG).
The first package was awarded in October last year to a joint venture by Samsung C&T Corporation and Koh Brothers. These works cover the proposed Runway 3 extension and its vicinity, and are now underway, according to CAG.
CAG currently has two runways, and is expanding its runway and airfield capacity through a three-runway system expected to be operational in the early 2020s. This involves the extension of a third runway previously used by the military to handle larger aircraft, and connecting it to the rest of Changi Airport through a network of supporting taxiways. It is also building a suite of supporting infrastructure and systems to support the three-runway operations.
CAG said it looked forward to working together with both companies to ensure the highest quality and standards in carrying out the project.
Said Yam Kum Weng, executive vice-president of development (Changi
East & Terminal 4): "The development of a three-runway system is an important part of Changi Airport's expansion plans, which will take the Singapore air hub into its next phase of growth. The project, which takes place amid ongoing airport operations, is complex and requires meticulous planning and excellent execution across different phases."
Hock Lian Seng said the project will boost its construction order book to about S$980 million.
Both firms are not expecting the project to have a material impact on their earnings per share and net asset value per share for the current financial year.
Shares in Sembcorp Industries and Hock Lian Seng closed unchanged at S$2.74 and S$0.34 respectively on Monday, before the announcement.
