Jacobs Engineering Group Inc. (J - Free Report) recently partnered with the City of Wilmington to operate and manage its wastewater treatment plant. The company will also provide services for the city’s sewer overflow facilities and Renewable Energy Biosolids Facility.
Additionally, the deal combines the operation and maintenance of all facilities under Jacobs' management, and has options for added engineering studies and design-build projects to renew existing structures and develop value-added projects.
The base contract is valued at $20 million per year for an initial 20-year term, per the City of Wilmington projection. The contract also has options for additional two-year extensions for an expected contract term of 24 years.
Per the terms of the agreement, Jacobs will assume full operating responsibility for the entire system of wastewater treatment facilities starting Jul 1, 2020. The company can explore significant opportunities via this contract — which is one of the largest public-private partnerships for wastewater operations in the United States — as Wilmington is Delaware's largest city and the state's economic engine. The city’s wastewater operation serves more than 400,000 residents, and the wastewater treatment plant has a maximum treatment design flow of 168 million gallons per day (MGD) and up to 320 MGD in wet weather.
Jacobs will make important facilities and systems-oriented investments in the first three years of the contract to enhance its performance. Moreover, Jacobs will work in the city to leverage new technologies and systems to make the plant a net-zero energy facility and reduce greenhouse gas emissions in the future.
"This agreement continues our strong partnership with Wilmington, not only in providing innovative engineering and technical services, but as we continue to invest in impactful community programs and protect the environment through our sustainability initiatives," says Jacobs’ People & Places Solutions (P&PS) Operations Management and Facilities Services vice president Steve Meininger.
Notably, Jacobs’ P&PS business — which accounted for almost 65% of total revenues in first-quarter fiscal 2020 — serves clients of broad sectors like water, transportation, building and semiconductors. On Mar 26, the company received a technical design and planning advisory services contract from Enfield Council in a bid to deliver exceptional infrastructure in Upper Edmonton. Per the deal, Jacobs will offer multidisciplinary design and consultancy including environmental, land quality and water catchment management services at Meridian Water, a $7.75-billion, 20-year regeneration program in Upper Edmonton, which is located in the London Borough of Enfield, North London.
On Mar 5, the company reported that the P&PS segment secured a framework contract from the Swedish Transport Administration (Trafikverket) to provide strategic consultancy services for the new high-speed railway lines planned between Stockholm, Gothenburg and Malmö in Sweden.
Efficient project execution has been primarily driving Jacobs’ performance over the last few quarters. The company’s ongoing contract wins are a testimony to the fact. Backlog at the end of first-quarter fiscal 2020 grew 11% from the year-ago period to $22.7 billion.
Jacobs’ shares have outperformed the industry so far this year. The outperformance is likely to continue in the near term, buoyed by strong backlog, inorganic moves, its transformed portfolio, and increased focus on infrastructure, aerospace, cybersecurity and technical building projects.
Jacobs — which shares space with AECOM (ACM - Free Report) , KBR, Inc. (KBR - Free Report) and Fluor Corporation (FLR - Free Report) in the same industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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