September 23, 2009 / 6:46 PM / in 9 years

UPDATE 2-Canada's Aecon on cusp of building boom, CEO says

* Sees strong demand for next two to three years

* Expects oil sands developments to revive spring 2010

* Ecuador airport project is a concern

(Adds details)

By Nicole Mordant and Susan Taylor

TORONTO, Sept 23 (Reuters) - Aecon Group Inc (ARE.TO), Canada’s biggest publicly traded construction company, will have an amazing 2010, its CEO said on Wednesday, predicting a heavy workload for all its divisions that should last for up to three years.

The pipeline of work in Canada’s construction sector is unprecedented, in part fueled by a government stimulus package, and Aecon is well-placed to win a slice of the action, John Beck said in an interview.

“I think 2010 is going to be an amazing year for us. Because from what we can see now, all four of them (Aecon’s divisions) will be pumping,” Beck said at the company’s headquarters in Toronto.

“I’ve been in this business for 45 years. I’ve never seen as strong a pipeline of work as we see today. So we’re very optimistic ... Aecon will get its fair share of that,” Beck said.

He expects the expected robust demand, which has already propelled Aecon’s shares by more than 80 percent in the past year, to continue for two to three years.

Aecon and other construction companies are just now starting to enjoy the fruits of a C$40 billion ($37.3 billion), spending plan unveiled in May by Canada’s federal government to help the country dig out of an economic downturn.

The stimulus package is pumping money into three areas: infrastructure, which includes road and bridge construction; social infrastructure, which covers university buildings and courthouses; and municipal spending, which involves local works such as repairing city sidewalks and sewers.

Beck said the building boom isn’t only being driven by the government’s two-year spending plan but also by Canada’s growing population, demand for its vast mineral resources, and a pick-up in oil sands developments after a virtual “shutdown” in the fall of 2008.

“What we have started to see in the past two months is these green shoots,” he said of signs of a slow revival in projects in northern Alberta’s oil sands as the price of crude recovers to near US$70 a barrel.

Aecon’s earnings slid 37 percent in the second quarter to C$9.9 million largely because of a slowdown in its high-margin construction work in the oil sands as the oil price tumbled from record highs.

Beck sees oil sands projects cranking up again in the spring of 2010.

While conditions are ideal for its Canadian operations, an airport construction project in Ecuador remains a headache for Aecon.

The company owns a 45.5 percent stake in the half-built airport, from which it is due to collect revenue once operations start. But doubts surfaced after Ecuador’s constitutional court recently ruled that airport revenue belongs to the public and not private sector.

“We are concerned,” said Beck, who was in Ottawa this week to speak to officials of Canada’s government, which signed the original deal with the Quito municipality and subcontracted work to Aecon.

Beck said he visited the South American country three weeks ago with Canadian Trade Minister Stockwell Day to push the Ecuadoreans to make good on the contract.

“I smell goodwill on all sides,” Beck said when asked how discussions were going.

Aecon’s shares were 25 Canadian cents firmer at C$11.60 on the Toronto Stock Exchange on Wednesday. In 2008, the stock bottomed at C$6.51.

($1 = $1.07 Canadian)

Editing by Frank McGurty

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