22nd Jan 2008
Florence Chong
THE Sydney-based United Group is expected to generate about $500 million in revenues over the next 25 years from managing the facilities at a proposed sports stadium in Singapore.
Its wholly owned Singapore subsidiary, United Premas, was a member in the Sports Hub Consortium that won the rights to build $S1.2 billion ($950 million) project at the weekend.
United's chief executive, Richard Leupen, said this was its second private-public partnership (PPP) project in Singapore in less than two months.
Mr Leupen said United Premas would have a small equity stake in the project, known as the Sports Hub, and would manage the facility over the 25-year concession.
The consortium, led by French company Dragages, a subsidiary of Bouygues Construction, which also includes HSBC Infrastructure Fund Management as the main equity partner, will now negotiate the final financial terms of the contract.
It beat two other groups on the shortlist, including one led by Macquarie Bank, whose members included Lend Lease and the Australian Sports Commission.
"The project would be worth about $500 million in revenues for the United Group over the next 25 years," Mr Leupen said.
The Singapore Government said it would pay $S1.87 billion in that period for the stadium, described as the world's largest PPP sporting project.
Mr Leupen said United Premas was also part of a consortium, led by Gammon Capital, the Southeast Asia vehicle of Britain's largest construction conglomerate Balfour Beatty, which won the contract for an educational institution in November. Singapore's Ministry of Education chose the consortium to provide the IT platform of the Institute of Technical Education (ITE West) campus.
Last year, Mr Leupen's United Premas also won a five-year contract to manage the national sporting stadium in Qatar.
"These contracts represented a combined value of nearly $800 million in contract wins," he said. "They add between $50- $60 million a year to annual earnings which is a 50 per cent growth in the United Premas business. We are also part of consortium bidding for another PPP project (the refurbishment of five schools)."
It is also bidding for the security and fire services contract for the Sands Marina Casino and integrated resort, under construction next to the massive sporting complex.
United purchased the Premas business from CapitaLand for $S62 million in 2005. It has transformed its property management services business in Singapore.
Mr Leupen said the Singapore firm employed 1700 people working in major markets, including India, China and Southeast Asian countries. "We are growing at 50 to 100 per cent every year in India," he said.
When United first entered the property management sector six years ago, the business was earning $45 million a year.
Today, it employs 20,000 people globally and contributed $1.3 billion to its annual turnover of $3.5 billion.
http://www.theaustralian.news.com.au/story/0,25197,23087168-25658,00.html
