The Decmil Group Limited (ASX: DCG) share price is surging today after the company announced a contract win.
At the time of writing, the engineering company's shares are up 5.26%, trading at 60 cents.
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What did Decmil announce?
In this morning's release, Decmil advised that Rail Projects Victoria has awarded the company a contract to upgrade the Gippsland rail.
Decmil will join its partners through the VicConnect Consortium to undertake several works for the project. The work includes extending the Morwell crossing loop, upgrading level crossings and signalling, and adding second platforms at Bunyip, Longwarry and Morwell.
This will increase the frequency of trains running off-peak between Traralgon and Melbourne to every 40 minutes.
The VicConnect Consortium is a strategic alliance of Decmil, Arup, and Cimic subsidiary, UGL.
The entire Gippsland project is worth $300 million, with Decmil's share of the contract around $140 million. This brings the company's order book to $570 million thus far.
The company expects to start the major works sometime in the early part of this year and finish by mid-to-late 2022.
The initiative falls under the Victorian Government's $4 billion Regional Railway Revival program. It aims to improve every regional passenger rail line within Victoria while creating jobs in a COVID-19 environment. This includes the Ballarat line, Shepparton corridor, Warrnambool line, Geelong line, Bendigo and Echuca line, and the North-East line.
CEO commentary
Decmil CEO Dickie Dique welcomed the deal, saying:
We're delighted that the contract for this important project has been awarded to VicConnect.
We believe that the alliance with UGL and Arup to successfully deliver the Gippsland Line Upgrade will mark the beginning of a long and fruitful association.
This award enables Decmil to utilise the company's existing skillsets and equipment in a new market opportunity.
About the Decmil share price
The Decmil share price has fallen heavily over the past 12 months, losing more than 60%. Year-to-date, the company's shares are down almost 10%.
Decmil commands a market capitalisation of $73 million at the current share price, with approximately 128 million shares on issue.
