Granite Construction Inc. (GVA - Free Report) as part of a joint venture (JV), has been awarded a Airport Guideway and Stations Design-Build Contract by the Honolulu Authority for Rapid Transportation. Granite Construction will book its 33% share of the $875 million JV project into backlog during the third quarter of 2016.
The JV team is comprised of Granite Construction Company, Shimmick Construction Co., Inc. and Traylor Bros. The scope of work entails the construction of 5.2 miles of new elevated guideway between Aloha Stadium to the Middle Street Transit Center Station in Honolulu, HI. Per the contract, the team will also construct the Pearl Harbor Naval Base transit station, two stations near the Honolulu International Airport and the Middle Street station. Construction will commence in spring 2017 and is expected to be completed by 2021. This is the third guideway project in a series of projects to build a 20-mile light rail transit system for the City and County of Honolulu.
At the second quarter end, contract backlog was at a record $3.8 billion, up 25% year-over-year, fueled by new and enhanced client relationships. Record backlog presents the company with opportunities for focused and improved execution. It also provides organic and diversified growth, as well as improved financial results.
Subsequent to the second quarter end, Granite Construction was awarded a $29 million contract by the United States Army Mission and Installation Contracting Command to repair and repave the Campbell Army Airfield in Fort Campbell, KY. The company’s wholly-owned subsidiary, Kenny Construction Company was awarded a $23 million bridge reconstruction contract by the Illinois Department of Transportation related to the Jayne Byrne Interchange Project in Chicago, IL. These projects will be booked into backlog during the third quarter of 2016.
Further, consecutive quarter of year-over-year margin expansion in the Construction segment, continues to mitigate the weak performance in the Large Project segment. Moving towards the end of 2016, the company believes the FAST Act will begin to provide public markets with some of the well-overdue stability needed to equalize the difficult balance of modern infrastructure funding demands.
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