Shares in Lend Lease (LLC) rose 1.5% to $11.45 yesterday, while Transurban (TCL) securities were half a per cent higher at $7.26 after the news that the winning builders had been chosen to construct one of the country’s biggest infrastructure projects in the past couple of years.
Property and infrastructure group Lend Lease and its partner French construction giant Bouygues Construction (a big French media, telecoms and construction group) were named the preferred tenderer to build the $3 billion NorthConnex Motorway in Sydney.
The project was formally launched at the weekend by NSW Premier Barry O’Farrell and Prime Minister Tony Abbott.
Formerly known as the F3-M2 link, the project will be overseen by Transurban and its partners in the Westlink M7 toll road in Sydney’s west. Transurban already controls Sydney’s network of toll roads and tunnels.
The NorthConnex Motorway is a nine-kilometre twin tunnel that will link the southern end of the M1 Pacific Motorway at Wahroonga to the Hills M2 Motorway at the Pennant Hills Road interchange.
It will cost $2.65 billion to build the link, plus land acquisition and project delivery costs.
It is designed to take thousands of trucks off Pennant Hills Road each day by eliminating 21 traffic lights and offering reduced running costs, as well cutting 15 minutes from many truck trips – all for a toll payment
LLC & TCL 1Y – Lend Lease wins a share of $3 billion Sydney tunnel build
The award of the design and construct contract to the Lend Lease Bouygues joint venture is subject to planning approval being obtained and finalisation of contract terms. But seeing both the NSW and Federal governments made a big song and dance about the project on Sunday, that’s a forgone conclusion.
"The selection of Lend Lease endorses our position as a leading engineering business in Australia with significant capability to deliver large infrastructure projects," Lend Lease chief executive Steve McCann said in a statement on Monday.
It also helps the company’s image after a fire last Thursday stopped work on the $6 billion Barangaroo project in Sydney’s CBD. The fire and several other incidents on NSW construction sites in the past few months saw the NSW government’s Work Cover order a safety audit of all major building projects across the state in the next month.
If approved by the NSW government, the construction agreement will settle late this year, with actual work to start next year. Completion is forecast for 2019 at this stage.
The link will be jointly-funded by Transurban and the Westlink M7 shareholders, the NSW government and the federal government.
And late last night, Lend Lease also revealed it had won a second big contract in NSW – the more than half a billion dollar upgrade of a major rural highway.
The company said it is the $580 million upgrade of the Oxley Highway to the Pacific Highway on the NSW mid north coast.
The project includes 23 kilometres of upgrades and new roadwork for the Pacific Highway in the Port Macquarie district.
The project includes major road bridges and two river crossings. Work is expected to start later in the year.
It is the third project Lend Lease is involved in on the Pacific Highway.
