Leighton Contractors has been awarded a $115 million contract by Sydney Ports Corporation to deliver the main construction phase of the Intermodal Logistics Centre (ILC) at Enfield in South-West Sydney.

 

Located on a 60 hectare industrial site and connected by a dedicated freight line to Port Botany, the ILC at Enfield is part of a network of planned and existing intermodal facilities in Sydney. In full operation it will service around a quarter of Sydney’s total intermodal demand.

 

Mike Metcalfe, Executive General Manager of the Construction Division at Leighton Contractors, said securing the main construction contract with Sydney Ports Corporation was an opportunity to contribute to a critical piece of Sydney’s freight chain.

 

“The ILC at Enfield will help achieve a key objective of the NSW Government to move 40 per cent of port-related contained freight by rail. Once complete, container trucks will spend less time on the roads and freight logistics will become more reliable, cost efficient and economically sustainable,” he said.

 

Leighton Contractors recently completed $17 million of early works at the site, which included the construction of a vehicular bridge over the adjacent railway marshalling yards and drainage and earthworks for the construction of a frog habitat area.

 

“We look forward to continuing to work with Sydney Ports and bringing our integrated capabilities in rail, heavy pavements, structures, complex utility relocation and environmental management to the project,” Mr Metcalfe said.

 

Major features of the ILC include warehouse and container storage areas, an intermodal terminal and internal rail siding, northern and southern rail connections and an environmental project to encourage the recovery of the Green and Golden Bell Frog population in the local Greenacre area.

 

The contract is scheduled for completion in early 2013.

 

The parent company, Leighton Holdings Limited, has flagged that it will report an after tax loss of around $408 million for the 2010/11 financial year, which improves the earnings guidance provided to the market in April 2011 (a loss of $427 million). The company also confirmed its guidance for the 2011/12 financial year of an after tax profit of between $600-650 million.

 

Leighton Holdings’ Chief Executive Officer, Mr David Stewart, said that the company now has more confidence regarding Thiess John Holland’s ability to complete the Airport Link (APL) project by the contractual date of 30 June 2012.

 

“APL is showing good progress with the gross loss reduced from $730 million to $520 million as a result of no longer needing to provide for liquidated damages and time related costs, which would otherwise have applied for late completion. We expect that our claims, which we have not valued at 30 June, will be recovered at a later date which will restore our net position to at least that previously forecast.

 

“Good support is being provided by the client and the Government to facilitate on-time completion, and we trust that this support will continue,” said Mr Stewart.

 

Mr Stewart said construction of the Victorian Desalination Project (VDP) continues to be severely impacted by weather and industrial issues which are causing delays to the project.

 

“These and other factors have contributed to a further forecast deterioration of $278 million at VDP which is being recognised in the 2010/11 result. We are working with Aquasure – the PPP consortium developing VDP - to seek extensions of time to help mitigate the additional costs those delays are causing.

 

“The deterioration of VDP is mainly offset by asset sales, recognition of R&D tax credits and a gain on the consolidation of Devine Limited,” said Mr Stewart.

 

“The Leighton Group’s underlying results across the core contracting businesses were solid and we continue to win substantial new work in Australia and Asia. The Middle East is stabilising and continues to present a number of good construction opportunities.

 

Mr Stewart said a review of the company’s investment portfolio had resulted in a sale of its 5% stake in Burton Coal and a move to acquire a controlling interest in Devine Limited.

 

Preliminary Final Results will be announced on Monday 15 August.

 

Meanwhile, David Saxelby, Managing Director of Thiess Pty Ltd, has announced his intention to leave the Leighton Group later this year.  Mr Saxelby joined Thiess in 1993 and worked in a number of senior positions before being appointed Managing Director in 2007.  Bruce Munro, currently Thiess’ Chief Executive Mining, will fill the role of acting Managing Director until a formal appointment is made.