Shikun & Binui Ltd (TASE: SKBN.TA), a global construction and infrastructure company headquartered in Israel, today announced its first major project win in the United States – the win of a Public Private Partnership (PPP) project to design, build, finance, operate and maintain toll lanes on SH-288 in Harris County in Texas with the Texas Department of Transportation (TxDOT). This is the first major project win since the establishment of operations in the United States in 2012, as part of the Group's strategy to expand operations to the United States.
The project was won by a consortium in the name of Blueridge Transportation Group, comprising of three global developers (Shikun & Binui, ACS and InfraRed Capital Partners). The project is estimated at more than $1 billion, with construction costs of approximately $800 million. Shikun & Binui is a 50% member of the construction joint venture and its expected share in the construction revenues is approximately $400 million. The proposal of Blueridge Transportation Group was announced as best value proposal by TxDOT, who also received proposals from two other Spanish-led consortiums.
Upon project award, the consortium will proceed to execute the concession agreement with TxDOT and to secure the financing for the Project. The consortium will design, build, operate and maintain the toll lanes along 10.3 miles of State Highway 288 in Harris County, Texas (near the city of Houston) during the 52-years concession period and will collect tolls from the toll lanes users.
The design and construction works will include 4-lane express (tolled) lanes in the median of the existing highway, the reconstruction of a major interchange and multiple bridges and the installation of an electronic tolling system. The duration of the construction phase is expected to be approximately three years.
This is another major project win in a series of global infrastructure projects wins in the past year by Shikun & Binui, including the project for the design, build, finance, operation and maintenance of a toll road as part of the ring-road around Bogota, Colombia, totaling $550 million.
CEO of Shikun & Binui, Ofer Kotler commented, "A couple of years ago, we identified the United States as a target country for the expansion of our global activities, and I am pleased that today we were able to realize this vision. I am confident that this project will be the first of many more to come, and that we will continue to grow our business in the United States with further project wins under the leadership of our team."
Revenues from this project as well as previous projects won will add to the Company's revenue from infrastructure projects and construction internationally. During the first three quarters of 2014, international revenues in this segment amounted to $2 billion, constituting 45% of the total revenues of the Group. As of September 30, 2014, the Group's backlog amounted to NIS 9.7 billion (approximately $2.4 billion), of which NIS 6.8 billion (approximately $1.7 billion) or 70%, was from international operations.
Chairman of Shikun & Binui, Moshe Lahmani, commented, "This year we celebrated the 90th year of Shikun & Binui, and I am pleased that to mark the year, we have brought a new big project, in a new country. Expansion of the operations of Shikun & Binui into the United States is part of our long-term strategy to diversify the countries in which we operate and penetrate new markets. We bring a strong value proposition including uncompromising excellence in project execution, professional expertise and years of experience."
Tal Raz, CFO of Shikun & Binui, commented, "This win proves that we have the know- how to set a goal and achieve it. About three years ago, we inaugurated the US headquarters for managing infrastructure projects in the US. We are pleased to report the first mega project won by the US team where we can bring our extensive experience in all stages large scale complex PPP projects, starting from securing a timely financial closing, to high quality construction according to the best industry practices followed by long-term operation and maintenance to the highest standards throughout the term of the project. "
About Shikun & Binui Group
The "Shikun & Binui" Group is a global construction and infrastructure company engaged within and outside of Israel in seven operating segments: 1) infrastructures and construction contracting outside of Israel; 2) infrastructures and construction contracting in Israel; 3) real estate development in Israel; 4) real estate development outside of Israel; 5) renewable energy; 6) concessions; and 7) water. The Company's activities include mainly large-scale highly-complex projects for the private and public sectors, which integrate the concept of sustainability.