The E16 motorway in winter (Stray Croc/Wikimedia Commons)

Companies

Strabag to blast 2km tunnel through Norwegian mountains as profits soar

13 May 2016 | By GCR Staff | 0 Comments

Strabag, the largest construction firm in Austria, has been selected as main contractor to build a section of Norway’s E16 motorway, the most important link between Oslo and Bergen, the second city of Norway.

It will be the first contract for Strabag as sole contractor in Norway.

The work involves the Øye-Eidsbru section, located about midway between the two cities, and includes the laying of 4.5km of main road and 2.1km of side roads. The main work, however, will be a 2km long tunnel, to be excavated by blasting.

This section of the E16 lies in a mountainous area known as Filefjell, and the road will reach an altitude of 1km above sea level. Road construction has to take into account bitter winter temperatures of -25°C, and massive snowfalls.

Thomas Birtel, the chief executive of Strabag, commented: “After the Ulriken Rail Tunnel, we’re happy to be realising another interesting infrastructure project in Norway.”

The value of the contract to Strabag is around €37m ($42m). It will be completed in 2018.

Elsewhere, on 4 May, two of Strabag’s German subsidiaries were awarded a contract to upgrade 30km of the Berlin-Dresden railway line. The work, which will include track renewal and new overpasses, has a value of €66m ($75m).

The company released its full-year results for 2015 earlier this month. This showed that its profit before tax reached €341m ($387m), an increase of 21% over the previous year. Turnover also increased, by 5% to €14.3bn ($16.2bn).

Double-digit growth was also achieved in net income (after minorities), with a gain of 22% to €156.29 million, while earnings/share grew from €1.25 to €1.52. These developments have compelled the management board to propose to the AGM planned for June 2016 a dividend of €0.65, which will be the highest since the IPO in 2007.

Birtel said results reflected the group’s policy of putting profit before revenue and the success of its risk management unit. He said: “The construction business involves a high degree of risk, which is why risk management plays such an important role for improving the profitability.”

He added: “We are also working intensely on the digitalisation of the construction process under the concept of building information modelling.”

Top photograph: Norway’s E16 motorway in winter (Stray Croc/Wikimedia Commons)