CIMIC Group’s led consortium, Momentum Trains, has won $1.26 billion regional rail project to deliver a new regional rail fleet and a new maintenance facility in Dubbo, New South Wales. It’s a design, build, finance and maintain contract, awarded by Transport for New South Wales.
CIMIC Group Limited’s (ASX: CIM) companies UGL, CPB Contractors and Pacific Partnership forms part of Momentum Trains Consortium. As being part of it, the award of this new rail development project will reportedly generate $725 million revenue to CIMIC Group over the construction and initial 15-year maintenance term.
Chief Executive Officer of CIMIC Group Michael Wright stated that CIMIC Group’s end-to-end capability enables the company to finance and maintain the rail fleet, and deliver a state-of-the-art maintenance facility, combining the collective rail expertise of Pacific Partnerships, UGL and CPB Contractors.
As per the report, the project is expected to commence in early 2019 with the first trains to enter service progressively from 2023.
The project would include the CIMIC Group’s integrated approach where CPB Contractors will be responsible for the design, construction and maintenance facility at Dubbo, rail asset management company-UGL will maintain both rail fleet and maintenance facility, whereas Pacific Partnerships will provide leadership and equity financing for the contract term, as per the report.
UGL Managing Director Jason Spears stated “This contract strengthens the company’s position as the leading provider of rail asset management in Australia. It is committed to working with local organizations to generate employment and business opportunities that will deliver great community outcomes for the region.”
Beside CIMIC, the consortium includes Construcciones y Auxiliar de Ferrocarriles (CAF) and CAF Investment Projects and independent fund manager DIF. CIMIC Group told that Construcciones y Auxiliar de Ferrocarriles would be involved in the manufacturing of 117 rail cars whereas financial companies CAF Investment Projects and DIF will provide equity financing alongside Pacific Partnerships.
Pacific Partnership’s Managing Director Martin D’Uva said: “The company’s integrated approach positions the company to deliver a seamless, whole-of-life solution that achieves optimum outcomes. The company is focused on providing certainty of delivery and operational performance and ensuring customers benefit from safe, efficient rail service.”
CPB Contractors Managing Director Juan Santamaria said: “With the strong experience in delivering high-quality rail construction, its team would endeavor to safely deliver this important project for regional NSW.”
This rail project comes in line with recently awarded $90 million gas gathering infrastructure contract to CPB Contractors. Under that work package, CPB Contractors are required to deliver infrastructure and gas gathering works for over 300 coal seam gas wells to Australia Pacific LNG (APLNG) in the Surat Basin, Queensland, within the term of two years.
In today’s trading session, CIMIC Group’s shares are trading at $48.960, up by 0.225% (as at 3:30 PM AEST). CIM is currently trading at a Price to Earnings ratio of 20.290 x with a market capitalisation of $15.84 billion.
Over the past 12 months, the stock has surged up by 6.54% and has witnessed a positive price movement of 8.10% over the past three months.
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