Dive Brief:
- Eastman Chemical Co. has awarded Jacobs Engineering Group the contract for construction, maintenance and turnaround services at its Longview, Texas, and Kingsport, Tennessee plants, according to a July 10 Jacobs press statement.
- Jacobs has provided capital construction services for major Eastman plant projects since 2010, including the Kingsport site. Stephen Hillier, general manager and senior vice president of construction, maintenance and turnarounds for Jacobs, said the company's delivery model allows them to "drive value" for Eastman through increased productivity and cost efficiencies.
- In Zack's Equity Research analysis of the contract award published by Nasdaq, increased U.S. construction spending, the restrained pace of inflation and a $1.5 trillion infrastructure spending program in the works are some of the factors creating demand for Jacobs' construction and engineering services.
Dive Insight:
In August of last year, Jacobs announced it would acquire CH2M Hill in a $3.27 billion cash-and-stock deal, which the company finalized in December. This created a $15 billion entity with a focus on three international business lines — aerospace, technology, environmental and nuclear; buildings, infrastructure and advanced facilities; and energy, chemicals and resources.
Jacobs also said the acquisition would present new opportunities for growth in its infrastructure business, including water and transportation. Water, in particular, according to Jacobs, is a "$100 billion-per-year opportunity." The federal government is encouraging new water infrastructure projects by offering low-cost, long-term loans for those initiatives with regional and national impact.
The Environmental Protection Agency administers the Water Infrastructure Finance and Innovation Act (WIFIA) loan program, which funds eligible projects in areas such as clean water, drinking water, energy efficiency at drinking water and wastewater facilities, desalination, aquifer recharge, alternative water supply, water recycling and drought prevention and mitigation. Minimum loan amounts range from $5 million for a project in a community of 25,000 or less to $20 million for large communities.
In July 2017, the agency invited 12 projects, costing $5.1 billion, to apply for $2.3 billion of WIFIA loans. In April 2018, the EPA announced that as much as $5.5. billion would be available for a new round of loans, an amount that could help fund more than $11 billion of water projects. Applicants have until July 31 to submit letters of interest. The EPA estimates that there is more than $740 billion of drinking water and wastewater infrastructure in need of improvement.
