Jan 30, 2010

EFIC awards contractor over K1.3b

MORE than US$500 million (K1.3 billion) in performance bond from Export Finance and Insurance Corporation (EFIC) has been made available to support an Australian engineering and construction firm to undergo contracts in the multi-billion kina ExxonMobil led PNG LNG project in the country.

The firm McConnell Dowell Corporation Limited (McConnell Dowell) specialized in engineering, construction, maintenance and building company working on infrastructure projects in mining, oil and gas, water, petrochemical and transport will be involved in two contracts in the country.

This includes the construction of the new Komo Airfield in the Southern Highlands province and roads and bridges required for construction, together with the installation of a fibre optic communications cable.
According EFIC, McConnell Dowell will undertake the contract work with international joint venture partners. The performance bonds, worth over $US20 million (K53 million), have been issued under an existing bonding line that EFIC provides to McConnell Dowell.

The EFIC is the financial arm of the Australian government's export credit agency that provides finance and insurance solutions to help Australian exporters overcome financial barriers when growing their business overseas. It also helps successful businesses to win, finance and protect export trade or overseas investments where the local bank is unable to provide all the support they need.

The Executive Director, Origination and Portfolio Management of EFIC, Peter Field said the credit agency will lend $US350 million (K927 million) as part of a syndicate providing finance to the project.

"We're delighted that McConnell Dowell has won these contracts, as the principal reason for EFIC's involvement in the financing is to encourage the use of Australian companies like McConnell Dowell in the project. We expect to see more contracts awarded to Australian companies in coming months, as the project gathers momentum."

McConnell Dowell's bonding line with EFIC was established in 2006 and has supported several major construction contracts in Asia undertaken by the company.

"The scope, complexity and location of our projects means bonds aren't always available in the commercial market. Our ability to utilise EFIC's bonding line has streamlined our process for securing international projects and freed up our finance and bonding facilities for local projects," said CEO of McConnell Dowell, David Robinson.

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