As part of a continued expansion into the US public works sector, Spanish construction giant, Dragados, part of the ACS Group, has acquired New Jersey based Schiavone Construction.
T&TNA spoke with Paul Scagnelli, Schiavone’s Executive Vice President and Chief Engineer, about the acquisition, which he commented was for significantly more than the $50M being reported by some sources, together with what effect it may have on Schiavone’s operations. Scagnelli said that rather than be subsumed into Dragados USA, the Schiavone name and brand would continue to exist as a subsidiary with the same staff, offices and corporate identity.
Asked about the possibility of any job losses as part of the acquisition, which Scagnelli put at “over $100M”, he replied that on the contrary, corporate goals laid out by Dragados are for significant growth over the next few years and for Schiavone this would likely mean an increase in staff rather than losses.
Dragados has considerable equipment and R&D resources in Spain and communications were said to be already opening up with the intent to collaborate as much as possible. He said the acquisition by Dragados brought advantages associated with more availability of capital and easier bonding, which he felt could bring more opportunities within Schiavone’s grasp.
At the time of the acquisition, Scagnelli told T&TNA that Schiavone had $800M of works on its books. Relating to the recent news (T&TNA, Dec 2007, p5), that Schiavone has been awarded New York’s No. 7 Line Extension in JV with Skanska and JF Shea for 1.5 miles (2.5km) of twin tube rock TBM subway tunnels, Scagnelli said the team had begun to mobilize at the end of 2007 and that this process was continuing. T&TNA was also told that Herrenknecht has been picked as the preferred supplier for the project’s two TBMs.
Said to be the largest single procurement contract ever awarded by the Metropolitan Transportation Authority (MTA), at $1.45 billion, Scagnelli went on to describe the challenges associated with the project. These included time, difficult cavern excavations, track lowering at Times Square and underpinning existing subways.
Scagnelli confirmed that the awarded contract does not include the station at 41st and 10th, but that there was an option to include it as a scope change at a later date. He said the MTA was redesigning the station in question and that discussions were underway to establish a design and estimate for the option, which was understood to be subject to available funding being secured by the MTA.
It was noted that the JV partners had been informed along the way about the Dragados acquisition and Scagnelli summed up their response saying; “They were happy with Schiavone, so should be even happier with the extra backing of Dragados.”
