John Holland wins Melbourne prison contract

Construction and contracting giant Leighton Holdings announced today that its John Holland subsidiary has been awarded a contract for the design and construction of the Ravenhall Prison in Melbourne, for an undisclosed amount.

Leighton did say, however, that the contract, awarded to a consortium with GEO, Honeywell and Capella Capital, would generate about $650 million in revenue.

John Holland managing director Glenn Palin said the local community would significantly benefit from the deal.

“The Ravenhall Prison project will employ more than 700 people during peak construction periods, including staff, workforce and subcontractors,” he said.

“This involves a target of 4 per cent indigenous employment.

“Economic benefits will also extend to local suppliers.”

The scope of the work involves the design, construction, finance, operation and maintenance of a prison for 1,000 medium-security male prisoners, and a state-wide services building.

“In line with the federal government’s commitment to fund new infrastructure in coming years, state governments and private sector investors are committing to civil and social infrastructure that meets the needs of their local communities and we are proud to be assisting with this investment,” Leighton chief executive officer Marcelino Fernandez Verdes said.

“Much of this total infrastructure growth is expected to be funded by PPPs, providing opportunities for the group as equity participant, contractor and asset manager.”

Construction is scheduled to begin in early 2015, with an estimated completion date in late 2017.

Yesterday, media reports stated that leaked emails allegedly revealed senior Leighton executives discussing plans to inflate the cost of contracts on an Iraqi oil pipeline to disguise kickbacks to corrupt officials.

The emails reportedly showed senior staff within the construction giant looking at ways to hide a $24 million payment in Iraq by artificially inflating costs of providing security, accommodation and other services.

Leighton’s share price fell by 1.29 per cent to $20.67 per share at 2:30pm.