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SNC-Lavalin wins $42m EPC contract to expand Saudi cooling plant

SNC-Lavalin has bagged an EPC contract in Saudi Arabia after settling two lawsuits for $88m in Canada

SNC-Lavalin landed the EPC contract days after reaching a settlement for alleged misrepresentation of operations between 2009 and 2011.
SNC-Lavalin landed the EPC contract days after reaching a settlement for alleged misrepresentation of operations between 2009 and 2011.

A multimillion-dollar engineering, procurement, and construction (EPC) contract to expand Jabal Omar Development Company's district cooling scheme in Makkah, Saudi Arabia, has been awarded to SNC-Lavalin. 

Central District Cooling Company, a subsidiary of Saudi Tabreed, has handed Canadian SNC-Lavalin a $42m (SAR160m) EPC contract to build infrastructure needed to increase cooling capacity at the Mekkah site by a quarter.

Scope of the contract covers design, procurement, construction, and commissioning of an extra of 12,000 refrigeration tons (RT), including all the equipment, energy transfer stations and the chilled water network. 

Adding 12,000 RT to the Mekkah plant will lift overall capacity to 47,000 – an increase of 25%.

The contract award came in the same week as the Canadian business agreed to pay $88m to settle two class action lawsuits for what it said was alleged "misrepresentation" of its operations during 2009 and 2011. 

READ: SNC-Lavalin wins Saudi Aramco gas plant installation deal

Engineering work and preparatory construction work on the Makkah site has already started. Full-scale construction to expand the plant will get under way during July 2018. It is unclear how long the expansion work will take.

Canada-based contractor SNC-Lavalin is a big player in the global industry and generated revenue of more than $9bn (SAR33bn) in 2017. Just under a quarter of the company's revenue was generated by its operations in the Middle East and Africa.

READ: SNC-Lavalin’s net income rises 50% to $382m

Commenting on the contract win, president of infrastructure at SNC-Lavalin, Ian Edwards, said the win strengthened the company's grip on Saudi Arabia's district cooling market.

“With this seventh district cooling project in Saudi Arabia and our forty-sixth overall in the Middle East, not only are we confirming our world-leading reputation in this sector, but we’re also delivering on our vision of engineering complex projects for a sustainable lifespan,” said Edwards.

Mohamed Youssef, the senior vice-president of infrastructure for SNC-Lavalin in the Middle East, said the seventh district cooling project in Saudi Arabia demonstrated the company's ability to set up the services needed to supply residential and business units with chilled water.

"Our district cooling projects provide chilled water for residential apartments, offices, universities, hotels, military facilities, stadiums, hospitals and government institutions in the Middle East and this contract reflects our strategy of bringing the full spectrum of our global expertise to the region,” he said.

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Construction Week - Issue 746
Jul 20, 2019