Despite Growth, Firms Worry - Railworks Corporation

THE TOP 400 CONTRACTORS
OVERVIEW
the Patient Protection and Affordable Care Act and
the uncertainty of its effect on health-care providers.
However, contractors of all types, regardless of what
market they serve, have their own concerns about the
new health-care law.
Many contractors worry about the potential costs
and mandates under the new law. “Costs associated
with the required health-care coverage will have to be
addressed in the next 12 months,” says Joel Stone,
CEO of SpawGlass.
SpawGlass is one of many major contractors that
are concerned about the impact of the federal healthcare
law. “We work both union and non-union, and
the law requires us to provide specific levels of coverage
for non-union employees or face penalties,” says
Dunn of JE Dunn. He worries that expenses incurred
under the law will hurt many contractors.
“But there seems to be new or added levels of record-keeping
and compliance requirements,” Levy
says. Contractors are working hard to do more with
less, squeezing out efficiencies in their processes and
investing in technology and equipment to make themselves
more competitive in a tough, hard-bid market,
he observes. “We try to chase costs down, only to have
federal regulations require us to hire a new wave of
compliance officers. In a competitive market, you can’t
just pass these costs to the customer,” Levy says.
The construction industry sees positive signs and
uncertainties. Contractors continue to plan for the
turnaround that is bound to come, seeking new
markets and services. But some contractors are looking
a little further into the future than others. On April 16,
Bechtel announced it had become one of the investors
and collaborative partners with Planetary Resources,
a group researching the feasibility of mining asteroids.
“This is something that is probably 30 years away from
being a market, but it is something we are looking at
for the future,” says Dudley. n
Oil & Gas | By Gary J. Tulacz
Taking the Long View on LNG
The U.S. construction industry is
profiting from the shale-gas
production boom of the past few
years, and its effects go well beyond
the Lower 48 and Alaska. Bill Dudley,
president of Bechtel (No. 1), says
the U.S. gas boom also is influencing
the worldwide construction market.
For example, natural-gas prices in
the U.S. are about 75% lower than
markets in Japan and India. The
demand for cheaper U.S. gas means
the market for LNG import terminals,
particularly in Asia, will surge. For
example, GAIL, India’s state-owned
gas company, said in January it will
double the size of its Dabhol LNG
import terminal.
U.S.-based fracking also may
affect construction in Canada.
Canadian gas producers may be
rethinking gas export plans, focusing
on the Asian and European markets
as export destinations. “Instead of
seeing north-south pipelines in
Canada, you may be seeing them
going east or west,” Dudley says.
Low prices in the U.S. already are
scaring many other gas-producing
regions. In February 2012, Russia’s
Gazprom was pressured to lower its
prices by 10% to European
customers, who have the option of
importing inexpensive U.S. coal and
LNG. In fact, European coal imports
from the U.S. have risen 250% since
2005.
The Middle East is starting to
focus more on natural resources
other than oil and gas, which means
more projects in mining and
production facilities, particularly
aluminum smelters. For example,
Ma’aden Saudi Arabian Mining Co. is
building a $10.8-billion plant in Saudi
Arabia, while Emirates Aluminum is
spending $4.5 billion to expand its
Abu Dhabi plant. n
How to Read the Tables
Companies are ranked by construction
revenue in 2012 in ($) millions. Those
with subsidiaries (†) are listed by
company rank, which may be found on
the ENR website at www.enr.com. Firms
not ranked last year are designated as **.
Some markets may not add up to 100%
due to omission of the “other” miscellaneous
market category. NA= “not
available.”
Figures include prime construction
contracts, shares of joint ventures,
subcontracts, the construction portion of
design-construct contracts and construction
management-at-risk contracts when
the firm’s risks are similar to those of a
general contractor. Figures also include
the value of installed equipment when a
firm has prime responsibility for specifying
and procuring it within the scope of its
construction contract.
General Building includes commercial
buildings, offices, stores, educational
facilities, government buildings, hospitals,
medical facilities, hotels, apartments,
housing, etc.
Manufacturing includes auto assembly,
electronic assembly, textile plants, etc.
Power includes thermal and hydroelectric
power plants, waste-to-energy plants,
transmission lines, substations, cogeneration
plants, etc.
Water Supply includes dams, reservoirs,
transmission pipelines, distribution mains,
irrigation canals, desalination and
potability treatment plants, pumping
stations, etc.
Sewerage / Solid Waste includes
sanitary and storm sewers, treatment
plants, pumping plants, incinerators,
industrial waste facilities, etc.
Industrial Process includes pulp
and paper mills, steel mills, non-ferrous
metal refineries, pharmaceutical plants,
chemical plants, food and other
processing plants, etc.
Petroleum includes refineries,
petrochemical plants, offshore facilities,
pipelines, etc.
Transportation includes airports,
bridges, roads, canals, locks, dredging,
marine facilities, piers, railroads,
tunnels, etc.
Hazardous Waste includes chemical
and nuclear waste treatment, asbestos
and lead abatement, etc.
Telecommunications includes
transmission lines and cabling, towers and
antennae, data centers and web hotels, etc.
PHOTO COURTESY OF BECHTEL
enr.com May 20, 2013 ENR 12