The Group’s global mission is mainly demonstrated in its presence in foreign countries through permanent structures, branches and local companies which, due to their strong positions in the various markets, are ready to take advantage of the strategic potential and business opportunities to be found there.
Within the Construction portfolio of work in hand, the value of international business (€15,152 million) represented 69% of the total.
International market activity, totalling €2,860.5 million, represented 84% of the value of production at 31 December 2013.
Work on the Gibe III project continues. The contract for this work, signed on 19 July 2006 and with a value of €1,569 million, involves building a hydroelectric plant with a capacity of 1,870 MW, consisting of an RCC (roller-compacted concrete) dam which is 243 metres high, with a surface plant. Other permanent works include a total of 75 km of access roads, a new bridge over the Omo river and camps and facilities for the client.
In 2010, an agreement was also signed with the client for the construction of a 66 kV power line from the Wolayta Sodo substation to the Gibe III site. This line and the relative substations will remain the property of the client, EEPCo (Ethiopian Electric Power Corporation), but in exchange Salini will be supplied with discounted electricity.
On 30 December 2010, Salini Costruttori and EEPCo (Ethiopian Electric Power Corporation)entered into an agreement to construct the “Grand Ethiopian Renaissance Dam” (GERDP), which will be the largest dam in Africa (1,800 m long, 170 m high and with an overall volume of 10 million cubic metres), along with two plants located on the banks of the Blue Nile, equipped with a total of 16 turbines each with installed capacity of 375 MW.
On 12 March 2012, a second addendum was signed to formalise the request on behalf of the client to increase the voltage of the electric line between Beles and GERDP, from 132 kV to 400 kV. This change resulted in an increase of €42 million in the contract amount, resulting in a project total of €3.6 million.
Earthworks are currently in progress for the foundations of the main and central dams, while the new bridge over the Nile was completed in September 2012 and is open to traffic.
The works for the construction of the plants along the river bank, the permanent camp and construction site roads are substantially completed, as well as the works to divert the Nile into the relevant channel.
The work relating to the “Gurara Dam and Water Transfer Project, Lot A – Dam and Associated Works” project is near completion. The current value of the job, inclusive of the various contract addenda issued over the years (the contract was signed on 30 January 2001) is approximately €545 million. The 9-million m3 earth and rockfill dam, the intake structure and the 30-MW hydroelectric plant are complete; the power transmission line, the irrigation perimeter and some road works still need to be finished. Completion is scheduled for 31 December 2014.
Work continues on the “Development of Idu Industrial Area Engineering Infrastructure” project (the contract is worth around €237 million), involving the primary urbanisation of a new district in the capital, Abuja, destined for industrial use. The sewage and drainage systems are complete, the road network (including four viaducts) is 60% tarmacked and the construction of water and power supply networks is under way.
Work is also continuing on the design and execution of the Nigeria Cultural Centre and Millennium Tower (the contract is worth around €421 million). The structure of the tower has reached its final height of 170 m and work is under way into the assembly of architectural components, the underground parking area beneath the piazza is in the completion stages, the artificial tunnel connecting the two plots has been completed and the structures of the seven buildings which make up the Cultural Centre and the Auditorium are in an advanced stage of construction.
The section of urban motorway pertaining to the Extension of Inner Southern Expressway (ISEX), a project with a value of around €65 million awarded by the Federal Capital Development Authority on 13 January 2010, is at an advanced stage of construction. Three of the four main viaducts are complete, drainage works are nearing completion and most of the road section has been tarmacked.
The “Dualisation of Suleja Minna Road in Niger State” project acquired in November 2010, worth approximately €50 million, is currently under way. At present, the earthworks and drainage works are in the completion stages, paving has been partially completed and the construction of 3 bridges has been concluded, while the fourth bridge, the longest running across the Gurara river, is under construction.
Similarly, the “Development of District 1 Abuja North Phase IV West” project is being developed. This project’s overall value is approximately €250 million, and the awarding process was carried out in two steps (phase 1 on 30 December 2010 and phase 2 on 5 March 2012). To date, the construction of one of the main viaducts of the project is almost finished.
The “Adiyan Waterworks Phase II” project, worth €250 million, was awarded on 12 September 2012. It involves the design and construction of a water treatment plant with a capacity of 320,000 m³/day, destined to meet part of the water requirements of the population of Lagos. Mobilisation of the work site has been completed, the design of the plant is currently under way, and the construction of the civil works is in the start-up phase.
On 26 March 2013 Salini S.p.A. was awarded a contract for the construction of the Neckartal dam, worth about €200 million.
The instruction to begin work was received on 11 September 2013 and the mobilisation of the work site is underway.
Activities relating to the management and routine maintenance of the Bumbuna hydroelectric power plant and the related transmission line to the city of Freetown are progressing steadily. Power generation takes place in coordination with the National Power Authority, which is responsible for the country’s electricity distribution.
The contract value, originally €10.2 million, was increased to €26.1 million as a result of two addenda signed on 18 November 2011 and 18 December 2013 respectively.
The same applies to the “Rehabilitation of 21.2 km of urban town roads” project for the rehabilitation of several sections of main roads located in the four main cities of Sierra Leone. When five new contract addenda were signed, in June and October 2011, March 2012 and October 2013, the project’s value increased from the original €10.3 million to €30.2 million.
On 13 June 2013, an addendum to the original contract for original rehabilitation of some roads in the Lunsar area was also signed, for an additional value of €4.5 million.
Lastly, on 24 May 2013, a new contract was signed with the Sierra Leone Road Authority for the rehabilitation of 70 km of road within the “Sefadu roads rehabilitation project section 1 - Matotoka-Yiye”, worth approximately US$30.7 million funded by the Asian Development Bank.
In June 2012 the fifth and final turbine of the Bujagali Hydroelectric Power Project, concerning the construction of a dam with hydroelectric power plant (265 MW) on the White Nile, was inaugurated.
The civil works were completed along with the environmental restoration works, while the final certificate was released by the client BEL on 6 August 2013.
Though still in the critical demobilization phase, the work site continued to pursue highest standards in terms of relationships and interactions with stakeholders, gaining for the second year in a row the prestigious Uganda Responsible Investor (URI) Award, in recognition for having distinguished ourselves in the Engineering & Construction sector as a highly responsible investor on issues such as workers’ rights, product quality, the prevention of discrimination and corruption, and environmental protection.
The maintenance period for the “Autoroute Est-Ouest, troncon Bouira-El Adjiba” project (27 km motorway section), carried out by the “Groupement Todini Enaler”, came to an end in 2011.
Therefore, the client was submitted a proposal for an “avenant de cloture” including, in addition to the quantities actually executed, the technical, compensation and bonus provisions that had been deferred from the previous avenants to the closing one.
In November 2013, during a meeting with the ANA and Works Management, an agreement was formalised by which the Groupement was granted an amount of 851.3 million dinars and €6.2 million.
The final version of the document was delivered to the customer in the month of January 2014 with the aim of reaching a settlement in the first half of the current year.
With regard to the Algiers Inter-City Collector contract, the issues of a geotechnical nature relating to Shaft 5, due to the particular composition of the ground in the area surveyed, were solved.
After several technical evaluations, shared with the client, the final position of the shaft was chosen, starting the initial excavation and tunnel consolidation works.
Since the amount of the works described concerns additional activities, estimated at approximately €11.7 million, a specific avenant was submitted to the customer whose approval is being finalised.
In the early months of 2012, the “La Marsa” road project was completed in the first few months of the year by widening both directions of a 6-km section of the existing road to four lanes.
We are waiting for the client to sign off the final approval.
In 2010, we were awarded the contract to build the Sfax-Gabes motorway as part of the Maghreb highway.
This work, co-funded by the European Investment Bank (EIB), involves building two motorway lots of 25 km each in southern Tunisia and has a value of approximately €81 million.
Work, which began in March 2010, has been significantly delayed due to the social unrest that led President Ben Ali to flee the country and also due to the revolutionary uprisings that occurred in bordering Libya.
As a result and in agreement with the other companies awarded Sfax-Gabes lots, a claim was submitted to the client for the increased costs incurred.
The EIB, and later the client, accepted the principle of payment to the companies which submitted reserves due to the disturbances of the Arab Spring for 2011 and 2012. Specifically, the criterion for calculating the “compensation” was determined, which could favour the Group to the tune of approximately TND 22.5 million (equivalent to €11 million). The file is now being examined by the Comitè Consultatif de Reglement a l’Amiable des Litiges and is currently awaiting the signature of the Chef du Gouvernement.
Considering the political instability of the country, created also as a result of the recent resignation of the Government, it is expected that the claims cannot be resolved before the end of the first half of the year.
Pending the formalisation of the Avenant, an 18-month extension of the contract times was requested.
The service order to begin work on the Oued Zarga - Bou Salem stretch of motorway was received in May 2012. The project, which is worth around €39 million in total, is located in the north-west of the country. It is co-financed by FADES and involves the construction of 18.5 km of new motorway and the resurfacing of 6.2 km of state road.
The two contracts are part of the major Maghreb highway project, which will boost trade and economic growth in the area by connecting Mauritania and Egypt via Morocco, Algeria, Tunisia and Libya.
Lastly, it should be noted that in March 2013 the reserve presented for the M’Saken - Sfax project for the change in prices of raw materials was approved and paid. The amount paid equalled approximately TND 4.1 million (equal to €2 million).
The addendum to complete the Tokwe Mukorsi dam was signed on 8 April 2011 with the Zimbabwean government, represented by the Ministry of Water Resources Development and Management. The addendum, worth around €66 million, also involved the payment in full of delayed receivables due from the client for previous addenda, equal to approximately €11 million, which was paid in full.
In 2012 and 2013, four new contractual amendments were granted, contributing to the restatement of the contract value as a result of the recognition of new designs, increased amounts of excavations and extensions of contractual terms.
The work, which would create the highest dam in the country and the largest artificial lake in Zimbabwe, involves the construction of a raised rockfill with a maximum height of 90 metres, a capacity of 1.8 billion cubic metres and the potential to irrigate approximately 25,000 hectares of agricultural land.
The work site has completed the roads, building about 43 km of roads and carrying out the excavations for the main dam and five saddle dams, the intake tower and the diversion tunnel. The embankment and two spillways are currently under construction.
In August, a consortium of Italian companies, among which the Group is the lead partner with 58%, including the Società Italiana per Condotte d’Acqua, Pizzarotti & C. and Muratori & Cementisti - C.M.C. Cooperative, signed a contract for the construction of the first lot of the new Libyan coastal highway, called “Ras Ejdyer - Emssad Expressway project”, for a total value of approximately €945 million.
The new highway will cross 1,700 km of Libyan territory, from the border with Tunisia to the one with Egypt. Its construction is an integral part of the agreements signed between the Italian Government and the Government of Libya, with the signing of the Treaty of Friendship and Cooperation on 30 August 2008.
The lot to be built by the Group will be 400 km long and stretch from the city of Al Marj Emsaad to the border with Egypt.
The motorway will have three lanes in each direction plus an emergency lane, and the most significant works will include the construction of 14 bridges and 52 viaducts, 8 service areas and 6 parking areas.
The contract will be financed by the Italian government.
In 2010, a contract awarding the rehabilitation of the Kufra airport runways was signed, worth around €53 million.
After a long period of political instability that has prevented the start of works, the country’s commissioning authorities have resumed the original commercial and contractual relationships in order to reopen the work sites.
Therefore, the relevant guarantees were submitted and, in July 2013, the contract advance was finally received.
The work site mobilisation activities have started.
On 27 June 2013, a new contract was signed for the Kufra Urbanisation project. The design activities will soon start, while works are planned to start in 2014.
The agreement for the construction of the new runway at Tripoli airport is yet to be formalised. The signed documents are expected to be received by the end of the next semester.
In March 2009, procedures for the participation of Impregilo, together the CMC of Ravenna and a local company, were formalised for the construction of a hydroelectric plant in South Africa. The total value of the project, of which Impregilo holds a share of 39.2%, amounts currently to about €948 million. The project, called ‘Ingula Pumped Storage Scheme’, involves the construction of a generating and pumping plant with a total installed capacity of 1100 MW, which will generate electricity during peak hours and reuse the water pumping it into the upstream basin during hours of less demand.
On July 29th, the subsidiary Impregilo, as the lead partner of an international consortium including the Italian company Ansaldo STS, the Canadian company Bombardier, India’s Larsen & Toubro and Saudi Nesma, won a 18.85% of the maxi-contract sponsored by the Riyadh Development Authority for the design and construction of the new Line 3 (40.7 km) of the Metro Riyadh, the longest line of the major project for the new metro network in the capital of Saudi Arabia.
The lot assigned to the Consortium is an important part of the broader project of the contemporary construction of the new Riyadh metro network (consisting of 6 lines with an overall length of about 180 km), worth a total of about US$23.5 billion. In addition to the one awarded to the Consortium to be led by Salini Impregilo, the successful contractors for the other two mega-lots include two other global groups, including some of the largest companies in the world: one led by the US company Bechtel and composed of Almabani, CCC and
Siemens and the other led by the Spanish company FCC, including Samsung, the Saudi company Freyssinet, Strukton and Alstom.
The total value of the works to be carried out by the Consortium for the design and construction of the entire Line 3 amounts to about US$6.0 billion, of which about US$4.9 billion in civil works.
United Arab Emirates - Dubai
The “R881 Comprehensive improvements of the parallel roads” project, involving the construction of a stretch of motorway (lots 2C and 3A) in the city of Dubai, was delayed as a result of the continuing financial and liquidity crisis that hit the country to the point that it could not ensure regular payments at specific stages of the work. Production activities were fully resumed in 2012, also owing to payment by the client of some claims for lot 2C (AED 40 million) and to further advances for lot 3A.
The project mainly includes building 30 bridges, resurfacing more than 200,000 square metres of road and providing a large number of underground works.
All structures and roads were open to traffic in December 2013 and the request of inspection for the “taking over” certificate was submitted to the Principal.
An additional agreement worth AED 20 million was signed with the client by way of compensation for the additional costs incurred during lot 3A during “slow down” period resulting from the economic crisis that hit the Emirate.
United Arab Emirates - Abu Dhabi
Through the subsidiary Impregilo, the construction in the UAE of two lots of the STEP Programme (Strategic Tunnel Enhancement Programme) is near completion. It involves the construction of a tunnel that will collect wastewater by gravity from the island and the mainland of Abu Dhabi and convey it to the treatment plant in the city of Al Wathba. Impregilo is building 25 km of the tunnel, which will ultimately measure 40 km. The overall value of the contracts amounts to about US$445 million.
In December 2013, consortium composed of Salini S.p.A. and the local contractor Tristar Engineering & Construction was awarded the “Abu Dhabi - Dubai road, E 311, Package B” project.
The contract, valued at AED 840 million, equivalent to about €168 million, cover approximately 28 km and includes three new motorway junctions with six concrete bridges
United Arab Emirates - Qatar
On 17 May 2013, the subsidiary Impregilo, lead partner with a share of 41.25% of a joint venture, won the tender organised by the Qatar Railways Company for the design and construction of the ‘Red Line North Underground’ in Doha. The ‘Red Line North’ will run north about 13 km from the Mushaireb station with the construction of 7 new underground stations. Specifically, the project involves the excavation of two parallel tunnels, one in each direction, approximately 11.6 km in length and 6.17 metres in inner diameter. The new project, along with 3 other metro lines, is part of a programme to build a new system of mobility infrastructure promoted by Qatar under the National Development Plan for 2030 (‘Qatar National Vision 2030’), which provides for significant investments to ensure sustainable economic growth over time within the country and abroad.
The total value of the ‘Red Line North’ contract amounts to about 8.4 billion Qatari Rial, equivalent to approximately €1.7 billion, of which about €630 million for the design and civil works and about €1.1 billion in provisional sums for preparatory works, electromechanical systems and architectural structures of the stations.
In Malaysia, the Ulu Jelai hydroelectric project is currently under way, which includes a first lot relating to the access roads (CW1) and a second lot (CW2+EM1) that involves building an RCC (roller-compacted concrete) dam 90 metres high, an underground plant with 372 MW installed capacity, complete with hydro-electromechanical equipment with intake works, and approximately 25 km of tunnels.
In December 2013, came the award of a third lot of the project (CW3) consisting in the rockfill protection of the basin banks, worth about €70 million bringing the value of the contract to approximately €598 million.
The construction works, carried out by the subsidiary Salini Malaysia within a consortium with local partner TMSB (Salini 90%, TMSB 10%) will continue until 2016. The first lot of the project, which consists of the access road, has been completed and delivered. As far as the main lot consisting of the dam and the hydroelectric plant is concerned, the dam excavations and the works to divert the river were completed on 30 September 2013, while the underground excavations for the underground plant and the tunnels that make up the plant pumping and return system are at an advanced stage.
There are also ongoing business development activities in other countries in the region, which have so far mainly regarded the pre-qualification for the metros in Hanoi and Ho Chi Minh City in Vietnam, the prequalification for the Tembourong bridge in Brunei, and the prequalification for the Cisokan pumped storage plant in Indonesia.
Work continues on the project awarded in December 2009 for the rebuilding of the “Western Europe - Western China, lots 1-5 and 9-14” International Transit Corridor, one of the most important sections of road in Kazakhstan’s road infrastructure.
The contract is divided into 11 lots and has a total value of approximately €680 million. It involves building and rehabilitating the existing road corridor over a total distance of 630 km. Work is in an advanced phase and during the year “Taking Over Certificates” were issued for lots 9, 11, 12, 13 and 14.
In July 2013, the subsidiary Impregilo S.p.A. and Todini Costruzioni Generali S.p.A., in a joint venture with the local company Kazakhdorstroy, were awarded the construction of four lots of motorway linking the city of Almaty to Khorgos.
The project, promoted by the Ministry of Transport and Communications of the Republic of Kazakhstan, is worth approximately €272 million.
The work, funded by the World Bank, consist in the modernization and doubling of the existing motorway for a total of about 193 km and in the construction of 5 viaducts.
The four lots are part of a larger project called “Western Europe - Western China International Transit Corridor”, which is the road corridor between Western Europe and Western China, the so-called new “Silk Road”, to improve the network infrastructure of the area, developing trade to and from Europe.
Activities for the installation of the work site and the mobilization of equipment are in progress, as well as the preparation of areas for workshops and warehouses.
The ability of the Group to play a strategic role in the implementation of infrastructure projects in the country is testified by the award to the subsidiary Todini Central Asia - always in July 2013 - of the project for the reconstruction of a 41-km lot of the Almaty - Ust - Kamenogorsk road, worth about €92 million.
During the year earthworks and the milling of the existing road surface were started, as well as the construction of sub-bases for about 10 km.
Lastly, on 28 November 2013, the joint venture formed by the subsidiaries Todini Costruzioni Generali and Impregilo S.p.A. and by the Azerbaijani company Akkord, was awarded the contract called “Rehabilitation of Almaty - Korday - Blagoveshenka - Merke - Tashkent - Temez Road Section km 705 to km 742 (37.5 km) Corridor 3” (Shymkent-Tashkent Section). The works, worth a total of about €63 million, will start during the first quarter of 2014.
Work on the construction of the motorway section called “Alat - Masalli Highway” were interrupted during the second half of the year due to the failure of the client to recognise the additional expenses incurred in the course of work.
Specifically, the subsidiary Todini Costruzioni believed that a number of changes in the design of the contract had led to unexpected costs for the extraction of particular quarry materials, for the use of larger quantities of steel in the construction of the bridges, and for the need to import bitumen from neighbouring countries to Azerbaijan as a result of short supply in the local market.
Taking into account the client’s stance, it was considered appropriate - for commercial reasons - to sign a settlement agreement for the mutual termination of the contract.
This resolution and the consequent economic and financial provisions, under certain “to do” and arbitration clauses contained in the text, took effect only near the end of the current year.
Work on the Sveneti - Ruisisono contract was completed and the “taking over certificate” was received on 30 June 2013.
The project, which involved the construction of a 4-lane highway, including the construction of an 800-metre-long twin-tube tunnel, is currently in the warranty period.
In the meantime, three major road projects that are part of the main corridor of the country connecting Europe with Asia, are in progress. These are managed through a subsidiary in which the Japanese company Takenaka has a minority interest. A brief description of the contracts follows.
- The activities relating to the construction of the new Kutaisi Bypass, along the East- West Highway in the Zestafoni-Kutaisi-Samtredia stretch, started in early 2012. It is expected that approximately 17 kilometres of the main road will be opened to traffic by the end of the first half of 2014. The project is worth a total of approximately €47 million.
- A new contract was secured in March 2012, worth around €44 million for the construction of a 27-km two-lane fast-flowing arterial road on the Kutaisi-Samtredia section. On 18 July 2012, we received instruction to begin work, and this started with the initial mobilisation of people and equipment. About 14 kilometres of the main road are expected to be opened to traffic by the end of May 2014.
- On 11 March 2013 a contract worth about €46 million was signed for the construction of a 27-km, two-lane expressway in the Zestafoni – Kutaisi section. Work site development is currently underway, while some minor works preliminary to the main works were carried out.
The company Salini India Private Ltd. has been operational since the end of 2011, with its registered office in New Delhi. Salini S.p.A. has a 95% stake in the company, and the subsidiary Co.Ge.Ma. S.p.A. a 5% stake. Various pre-qualifications and bids for hydroelectric plants in the country have been submitted, the most recent of which is currently being prepared for the Pakal Dul (1,000 MW) hydroelectric plant in Kashmir.
The projects currently underway in the country are managed through the subsidiary Impregilo.
The project consists in the construction of civil works for a railway line of about 110 km, connecting Puerto Cabello to La Encrucijada.
In November 2011, Impregilo signed a contract addendum with the Institute of Railways for the completion of the Puerto Cabello - La Encrucijada line. The contract addendum includes a further extension of the line from the town of Moron to the port of Puerto Cabello. The total value of the new works provided for in the addendum amounts to about €763 million (with a share of 33.33% for Impregilo).
Work is also continuing for the construction of two additional railway lines in the “San Juan de losMorros - San Fernando de Apure” (252 Km) and “Chaguaramas - Las Mercedes- Cabruta” (201 Km) sections, of which Impregilo has a 33.33% share.
In December 2009, the subsidiary Impregilo won the tender to build a hydroelectric plant on the river Sogamoso in north-western Colombia, about 40 kilometres from the city of Bucaramanga.
The project involves the construction of a dam 190 metres tall and 300 metres long, as well as an underground power station that will host three turbines totalling 820 MW of installed capacity. The value of the project currently stands at about €590 million and the client is ISAGEN SA, a joint public/private licensee active in Colombia in the production of electricity.
Impregilo has also already completed the preliminary works of the dam, which provide for the construction of two diversion tunnels about 870 metres long and 11 metres in diameter and of a system of roads and access tunnels to the station.
As for the main project and the construction of the dam, already since the second half of 2011, there have been critical issues that have had a negative impact on both the level of production and profit margins. Specifically, these events included exceptionally bad weather that affected a significant part of Colombia, delaying significantly the works to divert the river, the concomitant presence of geological conditions substantially different from those contained in contracts, in addition to changes in the scope of work required by the client. In the first part of 2012, some of the most major claims made by the contractor were recognised and in 2013 a new variant of the contract related to the construction of new works connected to the dam basin was signed. Additional reservations made to the client are still under discussion.
At the end of July 2010, the Group, through its subsidiary Impregilo, won the tender for the management of the third lot of the ‘Ruta del Sol’ motorway project in Colombia. This concession, awarded to a consortium led by Impregilo and formed by the Colombian companies Infracon, Grodco, and Tecnica Vial and by the private investment fund RDS (owned by Bancolombia and the Proteccion Pension Fund), provides for the upgrading, widening to four lanes and management of the two motorway sections between the cities of San Roque and Ye de Cienaga and the city of Carmen de Bolivar and Valledupar. The project is worth a total of about US$1.3 billion. The concession contract provides for total revenues of approximately US$3.7 billion (of which 40% to Impregilo), including revenues from tolls and a public contribution of US$1.7 billion which will be paid starting from the construction phase. The concession will run for 25 years, including 6 years for the design and infrastructure upgrading phase and 19 years for management.
At the end of June 2010, the subsidiary Impregilo won the tender called by the client Colbun SA, a Chilean company active in the production of electricity, for the construction of a hydroelectric project in Chile, currently totalling approximately €250 million.
The plant will be located in Angostura, about 600 kilometres south of the capital Santiago.
Specifically, the project involves the construction of a main dam, 152 meters long and 63 metres high, a secondary dam 1.6 km long and 25 metres high, and the underground plant hosting three generators with an installed capacity of 316 MW. The electricity produced will amount to approximately 1540 GWh per year.
From the second half of 2011, the project started to show some critical issues, owing to growing problems related to the socio-environmental conditions, substantially different from those forecast during the tender phase and to operating conditions of the work site also resulting in changes in the work requested by the client. The litigation initiated against the client, part of which is ongoing, has allowed a partial containment of the effects that these critical issues have had on to the profit margins of the project, which at the date of this financial report on 31 December 2013 are still negative and fully reflected in the amounts recognized in the financial statements at that date.
On 11 February 2013, the Empresa de Transporte de Pasajeros Metro Santiago S.A. awarded the JV comprising Salini S.p.A. and Impregilo S.p.A. the contract for lots 1 and 2 of line 6 of the Santiago metro line in Chile.
The work involves the construction of six stations and the excavation and surfacing of 8,515 metres of tunnels.
On 15 July 2013, the subsidiary Impregilo, in association with the US subsidiary S.A. Healy, was awarded the contract for a lot within the framework of the environmental remediation programme in the metropolitan region of the Province of Buenos Aires for the construction of the new wastewater collector in the capital city. The value of the project, promoted by AySA (Agua y Sanamientos Argentinos SA), one of the major players in the water sector in Argentina, amounts to about €360 million.
The project involves the collection of wastewater at the Riachuelo treatment plant through a well about 40 metres deep. The wastewater will then be conveyed through a tunnel 11 km long and 3.8 metres in diameter, to a diffuser that will be built on the bed of the Rio de la Plata.
The project has a strong social and environmental impact and is a first part of a broader programme, funded by the World Bank, for the sustainable development of the Matanza- Riachuelo Basin, aimed at the environmental recovery of the Riachuelo River, considered to be one of the most polluted in the world, and the lands crossed by it.
In July 2009, the subsidiary Impregilo, through the consortium Grupo Unidos por el Canal - a consortium including Sacyr Vallehermoso (Spain), Jan de Nul (Belgium) and the Panamanian company Constructora Urbana (Cusa) - received the official notice of the award of the tender for the construction of a new system of locks as part of the project to widen the Panama Canal. The bid amounted to US$3.22 billion.
The project, which is one of the largest and most important civil engineering projects ever undertaken, provides specifically for the construction of two new sets of locks, one on the Atlantic and one on the Pacific side, which will make it possible to increase commercial traffic through the Canal and address developments in the maritime transport market characterised by the tendency to build larger vessels with a greater tonnage, called Post Panamax, compared to those that can currently use the existing locks.
With regard to the main types of critical issues identified in this project, please refer to the paragraph on ‘Risk areas of the industry’ in this section.
In 2008, the subsidiary Impregilo won the tender called by the Southern Nevada Water Authority (SNWA) for the construction of a system of collection and transport of the waters of Lake Mead, one of the largest artificial lakes in the United States, in order to increase the supply of water for drinking and domestic uses to the urban area of Las Vegas. The contract is worth US$447 million.
At the end of the first half of 2011, the Board of Directors of the San Francisco Municipal Transportation Agency awarded the Group, through its subsidiary Impregilo (in a consortium with the American company Barnard), the contract for the construction of the extension of the ‘Central Subway’ line of the city of San Francisco. The contract is worth a total of US$233 million; Impregilo, through its subsidiary SA Healy, is participating with an overall share of 45%. The project involves the extension of the existing subway line that runs above ground in the city centre, with the construction of two new single-track tunnels with a total length of 5 km that will be built with two TBMs having a diameter of 6.40 metres. The works are expected to last 35 months.
On 8 May 2013, Impregilo, in association with the Parsons Corporation, a leading construction company in the United States, won the tender for the design and construction of a section of the wastewater collection and treatment system in the city of Washington DC. This highly technological project is worth approximately US$254 million (the overall share of the Group is 65%). Impregilo will be lead partner of the project, which is expected to be completed in about four and a half years after the start of works.
The ‘Anacostia River Tunnel’ project is part of the ‘Clean Rivers’ project of DC Water and involves the construction of a hydraulic tunnel that runs largely under the Anacostia, a tributary of the Potomac River. The tunnel will be about 3.8 km long and 7 metres in diameter. The project also provides for the construction of six 30-metre-deep wells for collecting water. The tunnel will channel separately wastewater and stormwater to prevent the pollution of rivers during floods (combined sewer overflows or “CSO”) that occur during periods of heavy rainfall.
In December, a contract was awarded for the design and construction of the “Skytrain” bridge and other civil works, which constitute one of the main sections of the new North West Rail Link line in the city of Sydney.
The project worth about €220 million provides, inter alia, for the construction of a bridge of 4.6 kilometres in length over one of the city’s streets with the most intense traffic.
On 7 January 2011, subsidiary Copenhagen Metro Team I/S, a company established under Danish law whose shareholders are Salini S.p.A., Tecnimont Civil Construction and S.e.l.i., signed a contract to build the new line of the Copenhagen metro, which will be one of the most modern transport infrastructures in the world.
The “Copenhagen Cityringen Project” consists in designing and building the new circular metro line located in the city centre, including 17 stations and two tunnels of approximately 17 km with an expected traffic of 240,000 passengers a day.
The original contract value of €1,497 million was increased to €1,657 million following five addenda, on top of the three already exercised by the client in 2011.
As well as design work on the underground sections and stations, construction work is under way on all 21 of the sites (17 stations and 4 shafts).
Lastly, on 9 October 2013, the subsidiary Impregilo took over 39.995% of the interest held by Tecnimont Civil Construction in the Copenhagen Metro Team I/S, allowing the Group to hold a share near 100% in the association of undertakings engaged in the work.
The project involves the construction of the driverless metro in the city of Thessaloniki. The contract was signed in 2006 and the subsidiary Impregilo is involved with the Greek construction company Aegek S.A. and Seli S.p.A. for the part relating to the civil works. The project involves the construction of a underground driverless metro including two tunnels, 9.5 km in length each and 13 new underground stations.
In addition, at the end of 2012, Impregilo, as part of a joint venture with the Greek company Terna S.A., won a contract for the construction of the new Stavros Niarchos Foundation Cultural Center in Athens, Greece. The contract value is worth approximately €325 million, while Impregilo’s share amount to 51%, fully guaranteed and paid by the Foundation. The project by the architectural firm Renzo Piano Building Workshop involves the construction of an ecologically sustainable multipurpose centre about 4.5 km away from the centre of Athens, occupying a total area of 232,000 m2, largely covered by a public park. It will be completed within 38 months from the start of works. The initiative also provides for the construction of the new Greek National Opera, which includes a main theatre with 1400 seats and an experimental theatre with 400 seats, and of the National Library, which will be open to the public and host up to 750,000 books. Once the works are completed, the contract includes the management and maintenance of the Cultural Center for a period of five years, worth an additional €10 million.
On 21 December 2012 the State Road Agency received the letter of acceptance from the subsidiary Todini Costruzioni S.p.A. for the “Capital repair of M03 Kiev-Kharkiv- Dovzhanskyy road” project.
The contract, valued at approximately €229 million, is financed by the World Bank and involves the rehabilitation and extension of six road lots for a length of 112 km as part of a huge infrastructure programme aimed at improving the efficiency of Ukrainian transport.
On 17 November 2011, the subsidiary SKG, owned by Salini S.p.A., the local company Kolin and by Generali Costruzioni Ferroviarie, received an order to begin works for the “Rehabilitation and reconstruction of the Kosekoy-Gezbe section of the Ankara-Istanbul high- speed train project”.
This initiative, a symbol of the modernisation of Turkey’s transportation system, includes dismantling the existing railway as well as building a new double-track railway 55.6 km in length, which will link the country’s two “capitals”. The new railway will have an operating speed of 160 km/h.
The project also involves building the railway superstructure and carrying out signalling, electrification and telecommunications works.
In August 2012, the client issued a new order of service for the extension of the railway in view of the inclusion of a future third line.
The financing authority has formally approved execution and the formalisation of the addendum is pending.
The contract’s value is approximately €147 million.
The removal of the existing railway line was completed, like the civil works, while the railway works are in an advanced stage and the electromechanical works have been started.
On 26 March 2013, the Ministry of Health of the Republic of Turkey awarded Salini S.p.A., in JV with the South Korean company Samsung, the Dutch company Simed and the local company Kayi Insaat, the licence for the construction and management of a large hospital complex in the city of Gaziantep with a total of 1,875 beds to be developed on a site of just over 500,000 square metres.
The initiative will be realised through the PPP model (public private partnership) through a special purpose vehicle (SPV) in which Salini holds a 28% stake. The SPV, in turn, will outsource the design, construction and provision activities, worth a total of approximately €510 million, to a JV composed of Salini (33%), Samsung and Kayi.
The concessionaire was duly registered at the Chamber of Commerce of Istanbul on 20 June 2013 under the name of Gaziantep Hastane Sagalik Izmetleri Isleteme Anonim Sirket.
The design of the health care facility, which will be completed in about eight months, has been started, while negotiations among potential lenders, the project company (concessionaire or SPV) and the Minister of Health are in progress for the definition of financial conditions.
On 19 July 2011, a contract was signed to carry out resurfacing work on the 53-km M5 Minsk-Gomel road section, worth a total of about €93 million.
Work physically began in November 2011 after the client handed over the four lots assigned and was completed on 15 November 2013.
The contract is currently in the maintenance phase, which will end on 15 November 2015.
In April 2011, the subsidiary Impregilo won the tender for the design and construction of lot 3 of the Orastie - Sibiu motorway called by the National Company of Motorways and Roads in Romania (CNADNR). The contract is worth €144 million, funded 85% by the European Union and 15% by the Romanian government. The contract involves the construction of 22.1 km of motorway with two 2-lane carriageways, plus an emergency lane, for a total width of 26 metres. The Orastie - Sibiu project is part of a larger project called ‘Motorway Corridor No. 4’ that will connect the city of Nadlac, situated on the border with Hungary, to the city of Constanta, located on the western shore of the Black Sea.
On 11 October 2013, the joint venture between Salini S.p.A. and the company SE.CO.L signed the contract for the construction of lot 2 of the Lugoj-Deva road with the National Company of Motorways and Highways of Romania (CNADNR).
The project worth approximately €127 million will last a 30 months, of which the first six for the design activities.
On 3 April 2013, the subsidiary Salini Polska, together with Impregilo S.p.A. and the local company Kobylarnia, on 3 April 2013, was commissioned to complete the construction of the stretch - long about 35 km - of the A1 “Torun - Strykow” motorway connecting the cities of Czerniewice and Brzezie.
The project is worth a total of approximately €207 million.
Lots 1 and 2 were opened to traffic, while 10 km of the main route of lot 3 were made available.
The additional works are expected to be completed at the beginning of the second half of 2014.
The initiative, promoted by the General Management of the Polish Roads and Motorways Authority and co-financed by the European Community, sees the full application of the strategic commercial agreement signed with the Impregilo Group in September 2012.