Victorians travelling to and from Gippsland will soon have greater rail access through the Eastern region and to Melbourne with Rail Projects Victoria (RPV) approving $300 million in upgrade works to the VicConnect consortium.
The competitive tender was awarded to VicConnect which comprises of Decmil (ASX: DCG), CIMIC (ASX: CIM), UGL and Arup as part of plans to increase accessibility to regional Victoria that can accommodate growth in the Gippsland region. Works are expected to commence shortly and be completed by late 2022 with Decmil’s share of the contract valued at $140 million.
“We’re delighted that the contract for this important project has been awarded to VicConnect,” said Decmil CEO, Dickie Dique.
“We have a strong existing skillset that will be complemented by our Alliance partners to make VicConnect a significant force in delivering both this project and other rail infrastructure projects.”
Long-needed upgrades to the Gippsland Line are part of a $4 billion Regional Rail Revival program which will see Victoria upgrade all lines in the State and create 3,000 jobs in the process.
The Gippsland line in particular is serviced by V-Lines oldest fleet models where reliability has long been an issue for regular commuters on the line, often having to jump on bus replacements. With the upgrade, a second platform will be added at Bunyip, Longwarry and Morwell while the second platform at Traralgon will be reactivated. Track duplications and level crossing upgrades will also take place as part of the upgrade.
Securing this $140m contract, it takes Decmil’s current order book beyond $570m with the Company recently returning to profitability. For the Half-Year ending 31 December 2020, Decmil reported $165.1m in revenue which delivered $0.6m net profit after tax, a substantial improvement on the $31.4m loss reported for the previous corresponding period.
Alongside the working-from-home phenomenon brought upon by COVID-19, regional Victoria has received increased attention as Melbournians are more open to living further away from the city.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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