WorleyParsons’ JV buy out

Engineering services company WorleyParsons has moved to 100 per cent ownership of its Australian power and water joint venture Burns & Roe Worley Pty Ltd.

The buy-out of Burns & Roe followed a “disappointing” performance by the joint venture, which developed the Esperance power station two years ago and was currently building a new power station at Exmouth.

The acquisition price was $14.25 million, representing a payment of $10 million for the services business and $4.25 million for infrastructure assets located in Western Australia, in which WorleyParsons has an existing ownership interest.

The main infrastructure assets were the Esperance and Exmouth power stations.

In its 2005-06 results announcement, issued in August, WorleyParsons said: “The performance of the company's Australian power joint venture was disappointing, with operational difficulties on a number of contracts contributing to a small loss in the year.”

It said the $31 million Exmouth energy project had been affected by cost over-runs, resulting in an impairment charge of $1.9 million being recorded against the carrying value of the project.

WorleyParsons added that the $90 million Esperance energy project, which was in its second year of operation, had performed in line with expectations.

The power and water business, which had 85 staff in WA, would be renamed WorleyParsons Projects.

WorleyParsons said the acquisition would allow it to fully integrate the projects’ business with its existing activities, “allowing for better support and development of the power and water market in both the Australian and international markets”.

WorleyParsons is one of WA’s biggest employers, with a staff of around 2,500.

This number has grown substantially as the resources boom has fuelled growth in engineering services.