Boston, MA -- (ReleaseWire) -- 03/17/2014 -- Latest quarterly data for Q313 shows that Australia's construction sector is on the path to recovery and we believe this recovery will continue into 2014. This is reflected in our forecasts, with real growth expected to reach 3.4% in 2014, compared to 2.4% in 2012 and 0.7% in 2013. Our view is underpinned by the conducive monetary conditions for construction, a sustained recovery in homebuilding activity, and the potential for greater construction activity from the private and public sectors.
Key developments in the sector:
- In Thailand's Ratchaburi Electricity announced that it had pulled out from a bid for Australia's Macquarie Generation after failing to reach a deal with a potential partner. Macquarie is owned by the state government of New South Wales (NSW), and is the largest energy generator in the state, accounting for 26% of the state's generation capacity. The company's generation portfolio consists of the 2640MW Bayswater and the 2000MW Liddell power stations located in the Hunter Valley. These assets have a net book value of around AUD2bn, and the NSW government expects to receive more than the book value for these assets. The sale is expected to be completed by the end of March 2014. China's Shenhua Group, Brisbane-based ERM Power and Australian utility AGL Energy, are among companies still in the running for Macquarie's assets, according to a Reuters report citing people familiar with the process.
- In December 2013, Transport for NSW received proposals from two consortia to construct and operate the AUD8.3bn (US$7.55bn) North West Rail Link in Sydney, Australia. The Northwest Rapid Transit consortium includes Plenary Group, John Holland and Leighton Contractors while the TransForm consortium includes John Laing Investments, the Australian unit of Bombardier Transportation and Macquarie Capital. The contract work includes the construction of eight new railway stations; installation of tracks, signalling, mechanical and electrical systems and the operation and maintenance of the North West Rail Link, among other things. The operations, trains and systems contract is to be delivered as a public-private partnership. The contract is scheduled to be awarded in H214.
- In December 2013, Australia-based rail freight company Aurizon and Indian coal company GVK Hancock have entered into a joint venture (JV) agreement for the construction of a 300km narrow-gauge rail line from Queensland's Galilee Basin to export terminals. The narrow-gauge line will be used to transport thermal coal, with trains on the line expected to carry 25,000 metric tonnes of coal, connecting to Aurizon's existing network of rail lines in Queensland. The project is estimated to cost AUD6bn (US $5.5bn).
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