Boustead Bags $300m Libyan Township Project

Source : The Business Times, 23 August 2007

MAINBOARD-LISTED specialist engineering services and construction specialist Boustead Singapore has clinched a $300 million contract to design and build a new township in Al Marj, east of Libya's capital, Tripoli.

To give an indication of the project size, its value is just below Boustead's full-year revenue of $345 million for the year ended March 2007.

This contract also effectively doubles Boustead's order book to some $650 million, with earnings from the project flowing in over the next two financial years.

Boustead will undertake the project in partnership with Libyan-government construction giant, General Construction & Building Company (GCBC), with the Singapore company controlling a 65 per cent stake.

The deal calls for the consortium to design and build the township with 1,164 single storey semi-detached houses and supporting infrastructure on a 465-hectare site in the municipality of Al Marj.

The project will include amenities such as municipal water supply and sewage systems, education institutes and recreational facilities. Using Boustead's advanced pre-cast system and propless framework system for construction, the new township project is expected to be completed within 24 months.

Boustead-GCBC will appoint Surbana International Consultants Pte Ltd as the main consultant, marking Surbana's first foray into Libya. Surbana, formerly known as HDB Corporation, has vast expertise in new-township planning, having designed and developed 26 townships in Singapore which house 85 per cent of Singaporeans.

Wong Fong Fui, chairman and group CEO of Boustead, said his company was excited with the prospect of developing a brand new township in Libya in partnership with GCBC.

'Libya is a market where we have traditionally enjoyed great success and the award of the record $300 million contract affirms this,' he said. 'The contract is set to nearly double our current group order book. GCBC will enhance this new township project with its complementary capabilities in civil engineering as the largest government construction company in Libya. As for Boustead, this new township project is an extension of our strong set of infrastructure engineering capabilities, which we are able to offer to developing nations.'

The deal was welcomed by IE Singapore, whose CEO Chong Lit Cheong, applauded Boustead's breakthrough in the mega project.

'We are especially heartened by Boustead's efforts to work with other Singapore companies such as Surbana, to participate in this mega project, which will lead to the transfer of Singapore's software and experience in urban infrastructure and urban water management to Libya,' he said.

The new township project deal was inked following an IE-organised business mission to Libya led by Foreign Minister George Yeo in May 2007.

Boustead's Mr Wong envisions the Al Marj project marking the beginning of a pipeline of similar projects in Libya, and possibly, the rest of the region.

'This new township project is part of the government's long-term national plans to construct 400,000 houses in the country over the next decade,' he said. 'We foresee further participation in this sector in the future.'

Boustead said the latest contract would have 'a positive material impact on the profitability, earnings per share and net asset value per share' in its current financial year ending March 2008, and next financial year ending March 2009.