New orders for Salini Impregilo

New orders of around €1 billion have been acquired by Italian-based contracting group Salini Impregilo since the start of the year.

The group’s total pipeline of tenders and project initiatives is reported to be over €52 billion.

Of the new orders acquired in 2018, €450 million is accounted for by projects to be finalised, and €150 million for variation orders and share increases in ongoing projects.

Among the main projects for Salini Impregilo, whose CEO is Pietro Salini, are the extension of line 14 South, Paris Metro, which is worth €203 million. Salini Impregilo won a contract to extend the Metro line to Orly airport south of the French capital.

The project marks not only the group’s return to France after 20 years, but also its entry into the Grand Paris Express, the massive project that will expand the city’s public transport network to the periphery by 2030.

Lane Construction, part of the group and based in the US, won the contract for the I-85 in South Carolina. The $181 million (€152.41 million) contract entails rebuilding and widening Interstate 85. The work is expected to be completed by October 2021.

Also in the US, Lane’s plants and paving division saw contracts worth €128 million.

A project for a waste water treatment plant in Istanbul, Turkey, is worth €57 million. Following a diversification strategy, Salini Impregilo, through its Fisia Italimpianti subsidiary together with an industrial partner, has won a contract to build a water treatment plant for Istanbul Su ve Kanalizasyon Idaresi (ISKI), a municipal water utility company. The project is to be completed within 36 months.

Pipeline

The €52 billion pipeline of tenders and project initiatives already identified for the Salini Impregilo Group consists of 19% roads and highways, 42% railways, 28% dam, hydro and water, and 11% infrastructure and others.

Geographically, 24% is in North America, 23% Africa, 21% Asia and Australia, 13% Middle East, Latin America and Europe both 9%, with the group’s home market of Italy registering 1%.

Projects include the Cross River Rail project in Australia. Salini Impregilo entered the short list for a 10.2km railway line project that will pass through the city centre of Brisbane, with 5.9km underground.

In the Middle East, Salini Impregilo recently prequalified for The Avenues project in Riyadh. With a total estimated value of about $1 billion (€841.5 million), the project involves the creation, in several phases, of a complex with a shopping centre, two residential towers, two hotels, and a tower for offices and health services.

The group said it was also strengthening its presence in Qatar, participating in two tenders in Doha, one for the extension of the red line and one for the extension of the green line. The two projects, worth a total of more than $2 billion dollars (€1.68 billion), fall within the scope of a strategic plan with which the country intends to increase sustainable mobility through the strengthening of the metropolitan transport system.

Salini Impregilo said the market outlook and business evolution confirmed the group’s business plan assumptions, and its targets were confirmed for 2018.

US infrastructure

With a view to consolidating its growth strategy in the US large infrastructure business sector, Salini Impregilo said it was currently evaluating several investment opportunities as well as non-core asset divestments options.

It has appointed investment bank and financial services company Goldman Sachs as financial advisor to assess strategic options for the plants and paving business unit of Lane, one of the largest hot mix asphalt (HMA) producers in the US with more than $600 million (€504.7 million) in revenue and about 45 plants along the East Coast and in Texas.

Salini Impregilo said these alternatives included the possible disposal of the unit.

It said, “A potential disposal would help refocus our US organisation and free up resources to fund the growth of the core construction business in the US, while at the same time allow to further reduce group’s gross debt.

“The company’s priority remains to maintain a solid capital structure and a sustainably balanced growth with shareholders’ value.”

It added that the American construction market continued to provide “an excellent source of opportunities”. Last year, Lane, claiming to be the leader in the roads and highways sector in the US, registered record growth with revenues increasing by 16.1% compared to 2016, and an order backlog growing by 19% to reach €3 billion.