Sapphire Corp. said on Monday its 97.6 percent-owned subsidiary Ranken Railway Construction Group obtained an EPC contract valued at 832 million yuan related to its public-private partnership (PPP) project in Chengdu, its largest contract win in recent years.
The EPC contract includes engineering, procurement and construction works related to water environment protection, ecological restoration, flood control measures, building infrastructure and lifestyle amenities for the PPP project, it said in a filing to SGX after the market close on Monday.
It has the potential for recurring dividend income from Ranken’s 25 percent shareholding in CDJ Environmental Management, which is the PPP project’s project company, and for recurring revenue from the operations management contract for the PPP project, it said
The PPP project, which was announced in November, was for Ranken and its consortium partners to carry out investment and financing as well as design, build, operate and transfer, or DBFOT, works with the Urban and Rural Coordination Work Bureau of Chengdu Wuhou District for the first phase of the “Liveable River Bank” project, the filing said.
The DBFOT works is expected to be 15 years, with two years of construction and operational and management rights for the infrastructure for 13 years, Sapphire said. The project includes designing, building and managing ecological restoration, flood control measures and building infrastructure along an 18.68 kilometer embankment on the Jiang An River, it said.
The consortium partners in the PPP project were Chongqing Derun Environment, Chengdu Wuhou Industrial Development Investment Management Group, Beijing Enterprises Water (China) Investment, it said.
Wang Heng, CEO of Sapphire, said working with its consortium partners would boost her company’s operational experience in the water environmental industry, possibly leading to further working opportunities with major industry players.
“Besides being a EPC contractor and a strategic shareholder in this PPP project, we also have the opportunity to be the manager of the new recreational amenities, F&B retail and lifestyle concepts along the river bank for a 13-year period, thereby developing our operational experience in this area and creating a new recurring revenue stream,” she said.