April 8, 2009 / 2:45 PM / in 9 years

Aecon joint venture awarded C$181 mln tunnel work

OTTAWA, April 8 (Reuters) - Aecon Group Inc ARE.TO said on Wednesday that its joint venture with two other builders has won a C$181 million ($147 million) contract to complete water tunnels in Vancouver, British Columbia.

Aecon, Canada’s biggest publicly traded construction and infrastructure company, is a 30 percent partner in the venture with Frontier-Kemper Constructors and J.F. Shea Construction.

Work to build the final section of a twin tunnel water-supply route from a pumping station to a filtration plant begins immediately, with completion seen in late 2012 or early 2013.

Aecon, which recently offered C$220 million to buy Lockerbie & Hole Inc LH.TO to bolster its business in Western Canada, said this project helps meet that growth objective.

“This project is meaningful for Aecon both because of its size and also evidence that the company is succeeding in expanding its heavy civil construction business into Western Canada,” Paradigm Capital analyst Corey Hammill said in a note.

“We expect to begin to see an increase in bid activity over the coming months as monies recently pledged during federal and provincial budgets begins to be allocated. We believe Aecon is very well positioned to win a considerable amount of work across all of Canada.”

Shares in Aecon gained 4.6 percent, or 49 Canadian cents, to C$11.09 on the Toronto Stock Exchange on Wednesday.

$1=$1.23 Canadian Reporting by Susan Taylor; editing by Rob Wilson

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