Snowy Hydro awards $5.1b contract

Snowy Hydro has awarded the $5.1 billion contract for the civil and electro-mechanical works for the Snowy 2.0 project to an Italian and Australian joint venture.

Future Generation comprises Italian hydropower and tunnelling specialist Salini Impregilo, and Clough, a Western Australian construction and engineering company.

The project is slated to take eight years.

Salini Impregilo has a 65 per cent stake in the contract, alongside its US subsidiary, Lane (10 percent), with Clough taking up the remaining 35 per cent stake.

Pietro Salini, chief executive Oofficer of Salini Impregilo, said the project would see the Italian group expanding its activities in Australia by entering the hydro sector.

“We are bringing know-how that we’ve acquired from hundreds of projects built throughout the world,” Mr Salini said.

“This contract consolidates our presence in the country where Salini Impregilo has been working in recent years, especially in the transport sector to expand sustainable mobility in cities like Sydney and Perth.

“This contract confirms our strategy to grow in the country and the investments that we have been making in recent years. Those made at the university level for the development of young talent has also gone in the right direction.”

Snowy 2.0 will triple Snowy Hydro’s pumping capabilities.

Snowy Hydro supplies the National Electricity Market at times of peak demand and, as more renewable energy sources enter the grid, will help keep the lights on when the wind is not blowing or the sun is not shining.

Under the terms of the contract, Salini Impregilo will link the existing Tantangara and Talbingo dams by excavating a series of tunnels and building a hydroelectric power station with pumping facilities located nearly one kilometre underground.

Hydroelectricity plays a key role in the country’s efforts to produce cleaner energy, given how it is responsible for 33.9% of renewable energy produced, according to Australia’s Clean Energy Council.

Australia is a leading growth market for the Salini, with its contribution to the Group’s total order backlog growing from 1.5% to 7%.

In Perth, Salini Impregilo is building a light rail metro called the Forrestfield-Airport Link to provide a better connection between the city centre and the suburbs. In Sydney, it is on the shortlist to deliver a major earthworks package for the Western Sydney Airport.

Last year, it completed the skytrain bridge and viaduct for Sydney Metro Northwest, part of the biggest public transport project in the country. For its work, it won the Project of the Year award for 2018 from Engineering News‐Record (ENR), an influential trade magazine.

Snowy 2.0 is the latest recognition of Salini Impregilo’s global leadership in the water sector as a builder of hydroelectric dams and other related projects, Mr Salini said.

Clough CEO and Managing Director, Peter Bennett said the $5.1 billion contract includes future escalation of prices through the duration of the project.

“We are extremely pleased by the award of this iconic project and are highly motivated to start delivering,” Mr Bennett said.

“Continuing to build on our relationship with Snowy Hydro Limited, we move past the preferred tenderer phase and now to final contract award. Our team is very excited to launch this project into its execution phase and to contribute our part into the advancement of Australia’s sustainable energy future.”

Clough is currently celebrating its 100th year in operation.

Mr Bennett said  the Snowy 2.0 project takes on the energy challenges of tomorrow, and the Clough Salini joint venture would strive to set new safety and performance benchmarks every single day to leave a lasting, positive legacy that enriches lives for years to come.

Snowy 2.0 will add 2,000 megawatts of energy generation and provide 175 hours of energy storage for the National Electricity Market, enough to ensure the stability and reliability of the system during prolonged weather events, such as wind or solar droughts.

Under the single wrapped Engineer, Procure and Construct contract, Future Generation will lead the civil works and Voith Hydro will deliver the latest hydro-generation technology in the new underground power station.