The Canadian construction sector is for sale as Aecon looks for a

Canada’s construction industry may soon have a better idea of how attractive it is to the increasingly globalized building sector as one of its biggest catches sits on the auction block awaiting bidders.Toronto-based Aecon Group Inc. is in the process of courting suitors after it put it itself up for sale Aug. 25, a move analysts say will draw players across Europe, the U.S. and China looking to size up the company’s — and Canada’s — potential.In its 140-year history, Aecon has been involved in landmark construction and engineering projects, including the CN Tower, Vancouver’s SkyTrain and the Halifax Shipyard. It currently has major contracts for Toronto transit and nuclear refurbishment, among others.However, analysts say its value has taken a major hit from the drop off of energy and mining projects due to a commodities downturn in recent years. Aecon’s share price has plunged 23 per cent in the past year alone to hover around $14 just before it announced it was weighing its options.“The Canadian construction sector is for sale right now, it’s pretty cheap,” said Frederic Bastien, an analyst at Raymond James.Bastien said there’s only a handful of companies globally that could make a serious bid for the company and that it would likely cost at least $1.5 billion to take it over. Interested parties could include Spain’s ACS Group, U.S.-based AECOM and Italian firms Astaldi and Salini, he suggested.However, he added, any firms looking to bid on Aecon will be making a bet on a recovery in the resource sectors, as well as banking on an increase in government infrastructure spending.“You have to believe that the natural resources sector will pick up, you have to be attracted, obviously, to the infrastructure spending.”The federal government has been looking to give the construction sector, and the economy, a further boost with promises of $180 billion in infrastructure spending over 12 years, but analyst Mona Nazir at Laurentian Bank Securities says the initial excitement has worn off as the spending has been slow.“We still haven’t seen that huge surge, and I think the initial expectations for that single high-digit organic growth, or even double digit growth, those expectations have been tempered in the market.”She said the proposed $35 billion infrastructure bank, while also slow to get going, could speed up projects once it gets established, while the impact of the hit to commodity prices is starting to dissipate.CIBC analyst Jacob Bout added Germany’s Hochteif as a possibility, but noted big international construction firms have become more focused on the U.S. market as it heats up, while also adding that Canadian regulators might not be so welcoming to Chinese interests.AltaCorp Capital analyst Chris Murray speculated in a note that some of the most likely buyers are those who have already worked with Aecon, like U.S.-based Kiewit Corp and ACS Group.He said he doesn’t see Canadian companies like SNC-Lavalin, WSP Global or Stantec making a run for Aecon because they’ve been increasingly turned focus to pure design work and away from construction, though at least one domestic company, privately-held construction firm Beattie LP has expressed an interest.Murray said he expects to see strong interest for the company based on Aecon’s record backlog of projects, its very strong positioning in Canada and expectations that the country will remain one of the most robust infrastructure markets globally.“With the announcement, we believe other bidders are likely to emerge making for a robust auction process for a very unique asset.” read more

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India to build 43000 houses for IDPs

The beneficiaries of the 43,000 houses will be selected through a transparent and norm-based process on the basis of clearly defined and objective criteria. The Indian High Commission said that the construction of 43,000 houses for resettlement and rehabilitation of war displaced in the north and east is part of the overall commitment by India to build 50,000 houses in Sri Lanka for the war affected communities. India is to build 43,000 houses for Sri Lanka’s war displaced communities in the north and east of the country, the Indian High Commission in Colombo said.Contracts to build the houses have been awarded to the respective agencies and the project will be implemented immediately. In order to ensure early operationalisation of this commitment, a pilot phase for the construction of 1,000 houses in the five districts of Northern Province was launched in November 2010 of which 950 houses have already been completed.In the last phase of the project, which is also expected to commence soon, about 6,000 houses will be directly built by construction agencies for people from most vulnerable sections of the war displaced in the northern and eastern provinces and for the estate sector in the Central and Uva Provinces, the High Commission said. The entire Project is under full grant assistance of the government of India with a total outlay of approximately 270 million U.S. dollars.Thousands of Tamils were displaced during the last stages of the war in Sri Lanka which ended with the defeat of the Tamil Tiger rebels after 30 years of fighting.Strong sentiments expressed in India, particularly in the southern Tamil Nadu area, towards the Tamils in Sri Lanka saw the Indian government coming forward to help the war displaced. (Xinhua) read more

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