SNC-Lavalin will build a district cooling system in the Saudi city of Mecca, site of the annual hajj, a pilgrimage that attracts Muslims from around the world, under a $92 million CAD contract announced yesterday.
The Montreal-based company, which provides engineering and project management services around the world, said construction is expected to begin this quarter under a contract from a subsidiary of Saudi Tabreed District Cooling Co.
District cooling uses a central plant to chill water that is then distributed to several other buildings that use the water to cool themselves before the water is returned to the central plant.
The first phase of the project, a chilled water production plant for the Jebel Omar Development, is planned for December 2013.
“We are delighted with receiving this contract, particularly because it is the third district cooling plant contract awarded to us in Saudi Arabia since May 2010,” SNC executive vice-president Charles Chebl said.
“This contract reflects our strategy of bringing the full spectrum of our global expertise to the region, and attests to SNC-Lavalin’s world-class leadership in the district cooling sector.”
Maxim Sytchev of Alta Corp Capital said the contract is relatively small, representing 2.7 per cent of its infrastructure and environment backlog and one per cent of its overall backlog.
“But it does show that the company’s clients continue to award contracts to SNC-Lavalin despite the negative news flow overhang,” he wrote in a report.
The ability to win contracts has been a key investor concern since internal problems arose in March.
“We view this contract as an important step in re-establishing investor confidence,” he said, point to it as the first international deal of size in months.
Source: Canadian Press
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