Dive Brief:
- Lane Construction Corp. announced that it has won, as part of a design-build joint venture with Security Paving Co., a $673 million contract to build express lanes along Interstate 10 in Southern California. Lane's portion of the contract is valued at $404 million.
- As part of the I-10 Corridor contract with the San Bernardino County Transportation Authority, the JV will build 11 miles of two express lanes in each direction from the Los Angeles/San Bernardino County line to east of the I-10/I-15 interchange. The project will start construction later this year and is slated for completion in 2023, helping the Inland Empire to manage the expected traffic congestion brought on by an anticipated 50% growth in the coming years. Already, according to the authority, more than 20,000 trucks and up to 263,000 vehicles travel the I-10 corridor every day.
- Italy-based construction and civil engineering group Salini Impregilo Group, Lane's parent company, announced last month that it had struck a deal to sell Lane's plants and paving division for $555 million cash to Eurovia SAS. The purchase is set to close by the end of the year. Pietro Salini, chief executive of Salini Impregilo, said the sales price is $100 million more than it paid for the entire Lane operation three years ago. The company said Lane will now focus on "large, complex infrastructure projects."
Dive Insight:
Lane has annual revenue of $1.7 billion and is part of some of the most significant public-private partnerships in the country. The company is part of the I-4 Ultimate Improvement Project team of SGL Constructors, along with Skanska and Granite Construction, which is building the $2.3 billion Interstate 4 project in Orlando. Lane is also part of Purple Line Transit Constructors, which will handle the construction portion of the $5.6 billion Purple Line light-rail project in Maryland. Lane is also set to participate in the design and construction of the $15 billion privately-funded high-speed rail line from Dallas to Houston.
Many of the same companies — Fluor, Granite, Lane, Skanska — pop up as part of joint ventures for major infrastructure projects, and there are a few reasons this is the case. One, companies that build up great expertise in specialties like express lane construction and highway design-build are in demand. Another reason is that they have a proven track record of financial stability, so owners or joint venture partners don't have to worry about them having some kind of money disaster midway through the project. This sort of financial strength also adds to the group's capacity when performance and payment surety bonds are a requirement of the contract.
