- Contract win worth £1.2 billion
- Crossing to provide a crucial link
- Focus on public works pays off
Construction and infrastructure group Balfour Beatty (BBY) has added another high-profile project to its UK order book with the Lower Thames Crossing contract.
The shares, which have risen more than 25% since their October low, added another 1% to 363p.
BUILDING BRIDGES
The new contract, worth a total of £1.2 billion, is from National Highways to deliver the ‘Roads North of the Thames’ works for the proposed Lower Thames Crossing and adds to the firm’s estimated £17 billion order book at the end of last year.
The new crossing under the Thames is designed to increase capacity and ease congestion in the South of England, with Balfour Beatty taking on the design and construction of over 10 miles of new motorway connecting the M25 at Junction 29 and the A13 with a new tunnel at Tilbury in Essex.
The project includes putting up 49 structures including bridges and viaducts which will be built off-site using modular construction.
The firm is expected to get the go-ahead in 2024 after an 18-month period of design and pre-construction planning, after which the full value of the contract will go into its order book.
Construction is scheduled to commence in 2024 with completion due between 2029 and 2030.
DIVERSIFIED INCOME
Balfour Beatty has been gradually increasing the amount of work it gets from public and regulated clients, allowing it to build a lower-risk, high-quality order book.
It was appointed as sole contractor on the £3 billion SCAPE civil engineering framework for England, Wales and Northern Ireland, as well as the £750 million Scottish framework, and is involved in the energy ‘transition’ through projects such as offshore wind and the Net Zero Teeside project.
In the US, the firm is benefitting from increased infrastructure spending under the Inflation Reduction Act and has a potential pipeline of over $30 billion of work on top of its existing projects which range from rail projects to facilities for the military.
It also has its own portfolio of ‘investment’ projects which were valued at £1.3 billion at the half-year stage, while disposals have tended to be substantially above the directors’ valuation and the initial outlay.
