Sembcorp Industries forms joint venture to take on Changi Airport work

SEMBCORP Industries has entered into a joint venture with civil engineering firm Hock Lian Seng Infrastructure to take on work from Changi Airport involving 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 remainder 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 and taxiway pavement works, drainage, mechanical and electrical works, security fencing, perimeter roads, ancillary buildings as well as other supporting work.

The airport's three-runway system is expected to be operational in the early 2020s.

The project will boost Hock Lian Seng's construction order book to about S$980 million, said the firm.

Both firms are not expecting the project to have a material impact on both companies' earnings per share and net asset value per share for the current financial year.

Clarification note: An earlier version of the story stated that the project is to add a third runway. Changi Airport Group has clarified that there is a currently third runway used for military purposes, and this is being extended. The article has been revised to reflect this.