NRW Holdings’ position as one of Western Australia’s largest private sector employers has gained further momentum after the Perth civil and mining contractor was confirmed as a key player in the delivery of the $852 million Bunbury Outer Ring Road project.
NRW (ASX: NWH) subsidiary NRW Contracting is a 40% partner in the South West Connex consortium, which was awarded the Bunbury contract. South West Connex’s other partners are Acciona, MACA Civil, AECOM and Aurecon.
The three-year project will provide substantial direct and indirect employment opportunities for West Australians and benefit both the state and local communities through significant cash injections to the state and local economies.
It is the biggest infrastructure project ever undertaken in WA’s South West and funded 80% by the Commonwealth and 20% by the WA Government.
NRW had announced in July that the South West Connex consortium had been selected as the preferred proponent. This week’s expected news of the contract award confirms the company’s order book at $3.5 billion.
NRW has been busy expanding its service offerings and reach across Australia with a series of value-accretive acquisitions over the past three years including Golding, BGC Contracting and parts of the RCR business. The buying spree has also left it well-positioned to capture public infrastructure work as part of government economic stimulus packages.
At June 30, NRW had more than 7000 workers on its payroll.
NRW is hopeful the Bunbury ring road project is followed by other WA public infrastructure contract wins including upgrades to the Mitchel Freeway, Leach Highway and Welshpool Road intersection (all in Perth) and the Coolgardie-Esperance upgrade at Emu Rocks.
“I am delighted that following negotiations with Main Roads the consortium has been awarded the contract for the Bunbury Outer Ring Road project,” NRW chief executive Jules Pemberton said.
“This announcement marks a significant milestone in NRW’s strategic evolution to an Australian Tier 1 contractor status and specifically our desire to build a large delivery capability across the Government Infrastructure works sector.
“The recent acquisition of BGC Contracting together with our existing capability in civil construction has both significantly accelerated and enhanced our ability to participate as a large construction partner in public works projects.”
The scope of the Bunbury ring road project includes construction of a 27-kilometre, four-lane highway from Forrest Highway near Australind to Bussell Highway, south of Bunbury. Once completed, new connections of Forrest Highway to Bussell Highway and South Western Highway will greatly improve freight capacity, efficiency and productivity across the region.
The contract scope also includes interchanges, rail and river crossings and 20km of new and upgraded local government roads.
Early stage work will get underway shortly and the project is due for completion in 2024.
NRW reported an 83% rise in revenue in the 2019-20 financial year to $2.06 billion for earnings before interest, tax, depreciation and amortisation of $250 million.
The net profit was $89.7 million, up 40 per cent on the prior year, and allowed the company to declare a 4¢ fully franked final dividend, which was paid this week.
NRW shares closed the week at $2.08 to give the company a market capitalisation of $909 million.