TORONTO, March 1, 2012 /CNW/ - Aecon Group Inc. (TSX:ARE) announced today that a joint venture between Aecon Industrial and SNC-Lavalin (the SLN-Aecon Joint Venture) has been awarded a major contract with Ontario Power Generation (OPG) to carry out the Darlington Retube and Feeder Replacement Project.
The Project, which includes refurbishment of all four reactors at the Darlington Generating Station, consists of two phases - a Definition Phase and an Execution Phase. During the four-year Definition Phase, the SLN-Aecon Joint Venture will:
a) Construct a full scale reactor mock-up where key elements of the refurbishment can be simulated and tested prior to work beginning on the actual reactors. This element of the Project will be carried out by Aecon Industrial.
b) Develop the specialized tooling required for the project. This element of the Project will be carried out by SNC-Lavalin.
c) Develop a detailed scope, schedule and budget for the Project's Execution Phase.
d) Procure critical reactor components for the first unit to be refurbished.
The Definition Phase consists of both fixed price and cost reimbursable elements, and is expected to generate over $600 million in revenue for the Joint Venture, of which more than $100 million represents revenues for Aecon.
The subsequent Execution Phase will be carried out by the SLN-Aecon Joint Venture, with costs and profits shared equally by Aecon and SNC-Lavalin. This phase will involve the actual refurbishment of all four reactor cores on a sequential basis, using the tools and methods that were developed and tested during the Project's Definition Phase. It will take approximately seven years to complete, and will be carried out on a cost reimbursable, target price basis after the OPG Board and the Joint Venture agree to transition to the Execution Phase.
"This major award builds on the successful partnership Aecon and SNC-Lavalin have forged on nuclear projects over many years," said John M. Beck, Aecon's Chairman and CEO. "It will help ensure Aecon's continued growth in the nuclear power sector for years to come."
"We commend Ontario Power Generation for the development of a thoughtful and prudent commercial approach that establishes a sound basis for success," said Paul Koenderman, Aecon's Executive Vice President. "This project fits well with Aecon Industrial's core capabilities. We are proud to have been selected for this important undertaking and we look forward to furthering our long-standing relationship with OPG."
Under the joint venture agreement between Aecon and SNC-Lavalin, Aecon will provide primarily construction and fabrication services to the SLN-Aecon Joint Venture, while SNC-Lavalin will focus on specialty tooling and engineering. Project management and procurement will be provided jointly by Aecon and SNC-Lavalin.
Aecon Group Inc. is one of Canada's largest and most diverse construction and infrastructure development companies. Aecon and its subsidiaries provide services to private and public sector clients throughout Canada and on a selected basis internationally. Aecon is pleased to be recognized as one of the Best Employers in Canada.
The information in this press release includes certain forward-looking statements. These "forward-looking" statements are based on currently available competitive, financial and economic data and operating plans but are subject to risks and uncertainties. In addition to general global events outside Aecon's control, there are factors which could cause actual results, performance or achievements to vary from those expressed or inferred herein including risks associated with an investment in the common shares of Aecon and the risks related to Aecon's business, including Large Project Risk and Contractual Factors. Risk factors are discussed in greater detail in the section on "Risk Factors" in the Annual Information Form filed on March 30, 2011 and available at www.sedar.com. Forward-looking statements include information concerning possible or assumed future results of operations or financial position of Aecon, as well as statements preceded by, followed by, or that include the words "believes," "expects," "anticipates," "estimates," "projects," "intends," "should" or similar expressions. Important factors, in addition to those discussed in this document, could affect the future results of Aecon and could cause those results to differ materially from those expressed in any forward-looking statements.
For further information: