Transfield Worley Wins Five-Year Contract for 2,200-Megawatt Power Station in Australia

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Researched by Industrial Info Resources (Sugar Land, Texas)--The joint-venture company Transfield Worley Power Services (TWPS) (Sydney, Australia) has won a five-year contract to provide maintenance and services for the Loy Yang mine and power station operations near Traralgon in Victoria, Australia.

TWPS is a 50:50 joint venture between Transfield Services Limited (ASX:TSE) (Sydney) and the Australian engineering and project services company WorleyParsons Limited (ASX:WOR) (Sydney).

The power station and associated open-cut brown coal mine, known as Loy Yang Power Station, accounts for about one-third of the electricity supplied by the state of Victoria. Loy Yang A has four generating units with a total capacity of 2,200 MW. The complex is operated by Loy Yang Marketing Holdings Pty Limited (Traralgon, Australia), which is a subsidiary of Great Energy Alliance Corporation Pty Limited (GEAC) (Traralgon).

GEAC is owned by AGL Energy Limited (ASX:AGK) (Sydney), which is Australia's largest gas and electricity retailer, and the Tokyo Electric Power Company Limited (TYO:9501) (TEPCO) (Tokyo, Japan), each of which holds 32.5% of the shares, and Transfield Services Infrastructure Fund (ASX:TSI) (Sydney), which holds 14%. The remaining shares are divided between the superannuation board for the Motor Trades Association of Australia (Canberra, Australia), the peak body for the Australian automotive industry, which holds 12.8% of shares; an industry superannuation fund, Westscheme (Perth, Australia), which holds 5.7%; and the South Australia-based Statewide Superannuation (Adelaide, Australia), which holds 2.5%.

The $171 million contract covers a five-year period and has a commencement date of July 1 this year. The contract was open for tenders and the TWPS tender was selected following extensive tender reviews. The current holder of the maintenance contract is Silcar Pty Limited (Bayswater, Australia), which has a combined work force of 115 staff on site, 70 at the power station and 45 at the mine. TWPS and Silcar will work closely together to ensure a smooth handover of the maintenance and service operations.

TWPS has a long association with the provision of maintenance and associated services to the Australian power sector. It provides operations and maintenance services to the 340-MW Collie A power station in Western Australia, which is operated by the Western Australian government-owned Verve Energy (Perth, Australia). The company also provides outage management services for three power stations in New South Wales: at Vales Point, Munmorah and Mount Piper.

The association between Loy Yang Power and Transfield Services goes back to August 2006, when the latter purchased a 9.3% interest in Loy Yang A for $106 million. The power station was privatized in 1997 for a massive $4.34 billion by the Victorian government, but was eventually sold in 2004 for $2.96 billion to the GEAC consortium, after an unsuccessful appeal by the government organization, the Australian Competition and Consumer Commission (ACCC), which attempted to block the sale on the basis that AGL would have too much market power.

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