For more than a year, Seli Overseas SpA has been establishing itself and expanding on the international stage as a new, ambitious, TBM tunnelling contractor. With a growing list of new projects and regional offices, the new entity has ambitions to establish its international headquarters in North America, which it sees as a key market.
While the name is a recent addition to the tunnelling sector, the pedigree of the management, engineers, technicians and crews draws upon many years of tunnelling experience.
Seli Overseas SpA was established in early 2014 as a divested division of Italian TBM and tunnelling company Seli SpA, which at the time was facing a combination of tough challenges – the economic recession in Italy, and ‘unfortunate’ commercial-related matters on a number of its projects. At this critical juncture in its history, Seli SpA decided to restructure and sell part of the business. Seli Overseas SpA is now owned by Grandi Lavori Fincosit SpA (GLF), a major Italian contractor with big plans of its own for international growth. As well as its general construction business GLF also operates specialist companies covering the marine, foundations and concrete structures construction sectors.
Seli Overseas, meanwhile, is pursuing more contracts and working to establish a deeper, successful regional network as its short-term goals. During a series of discussions with TunnelTalk, senior managers have outlined the new company’s longer-term strategy for the next 10 years and outlined the organisation’s chief goal: to become the first multinational TBM tunnelling contractor operating worldwide.
On the manufacturing, equipment and TBM design and supply side, Seli SpA will continue to develop its own business, quite separately and independently from Seli Overseas.
In January 2014, the first concrete step was taken to execute Seli SpA’s restructuring plan by legally establishing Seli Overseas SpA as a company. The following month, the assets of Seli SpA’s contracting division – staff, know-how, qualifications, experience and some plant and equipment – were transferred to the new company.
GLF’s acquisition of Seli Overseas was performed in two steps, as planned, and it now wholly owns the company. Financial terms of the acquisition were not disclosed.
As a top-five Italian main construction contractor, GLF has a strong financial standing, built from its exclusive focus on the domestic market. GLF, however, is now looking to expand internationally, and acquisition of a specialist tunnelling contractor is a strategic move aimed at advancing its longer-term business expansion plans. Remo Grandori is CEO of Seli Overseas.
The new contracting entity is busy expanding its regional network. The business has offices in Rome (its current headquarters), Miami (the expected future headquarters), Mumbai, Doha, and the Far East, and is considering opening a branch in South America, TunnelTalk has been told.
Structurally, each office and region is run by a subsidiary company, each established in line with local laws and regulations. This applies to joint venture structures, if required, such as that of Seli Middle East Construction LLC, in Qatar. The other established subsidiary companies so far are Seli Overseas USA, Inc., and Seli Canada, Inc, respectively; there is also the Seli Overseas India project office.
TunnelTalk has been told that during the restructuring process, and as part of the deal with GLF, Seli SpA transferred all its most recent and and forthcoming tunnel construction contracts to the divested contracting division, along with commercial initiatives and networks.
Seli Overseas is looking to engage in either main contractor roles, including joint ventures, or as a subcontractor. It already has tunnelling subcontract jobs under way in Qatar, Laos and India, and is actively pursuing a number of other international opportunities.
Describing its financial position as ‘positive’, and with GLF’s backing, Seli Overseas reports it has approximately €170 million of work-in-hand, and contracts in acquisition for a further €100 million.
In Qatar, Seli Overseas holds a tunnelling subcontract with the Alysj JV on Lot 2.3a of the Doha Metro Gold Line, for which it recently launched a pair of 7.2m diameter Herrenknecht TBMs for excavation of 4.2km of twin running tunnels.
In Laos PDR, Seli Overseas holds the tunnelling subcontract from turnkey contractor SK Engineering & Construction on the Xe-Pian Xe-Namnoy hydro scheme, sourcing the new 5.74m diameter hard rock Double Shield from Australia-based Terratec, which itself produced some parts of the shield in Japan and assembled the machine at its factory facility in China. The TBM is to bore the majority of the 13.7km long headrace tunnel through geology comprising mudstone, siltstone and sandstone.
In India, Seli Overseas is working on the tunnelling subcontract for Hindustan Construction Co (HCC) on the Vishnugad Pipalkoti hydropower scheme, which calls for construction of a 12.3km long headrace tunnel, and for which Seli Overseas has procured a 9.85m diameter TBM, again from Terratec. There is also the possibility of further work for Seli Overseas/GLF on the planned third line of the Sofia metro in Bulgaria, where contract award is expected in the coming weeks. Additionally there are two further contracts that are in the process of being transferred from Seli SpA – in Hong Kong and Vancouver, respectively.
In Hong Kong, the transfer is of the share in the 50/50 JV with Chun Wo on the MTR 1107 tunnels contract covering the Diamond Hill to Kai Tak section of MTR’s Shatin-Central Link metro project. Seli Overseas confirms to TunnelTalk that a refurbished 7.4m diameter Seli SpA TBM is being used for two 835m long drives. In Vancouver, the contract being transferred relates to works on the Evergreen Line metro project.
Seli Overseas is aiming to expand its international contracts across a full range of underground infrastructure developments, not restricted to TBM tunnelling. In pursuit of its goal to become the first multinational TBM tunnelling contractor operating worldwide, the company is looking at different ways to engage in contracts, and across a range of activities – equipment, lining, installations, excavation and grouting, for example – but it is also ready to provide crews only for TBMs.
Where TBMs are provided as part of the contract, Seli Overseas says it will source them from third parties in the competitive market but always with the machines being manufactured to its own specifications. Following the divestment, the contracting company has no ties or obligations to source new TBMs from Seli SpA, though the manufacturer could still be a supplier, TunnelTalk was told.
Following the divestment of its contracting division, Seli Overseas, Seli SpA remains as an entirely separate entity - one with a long and proud history in TBM design, innovation and supply.
Società Esecuzione Lavori Idraulici (Seli SpA) was founded in 1950 by Carlo Grandori, and quickly developed into two strong areas of business – tunnel contracting, and TBM and equipment services.
By 1960 the company was designing and operating precast lining and in situ lining systems, and by the end of that decade it had moved into hard rock open and single shield TBM excavation, before quickly advancing into TBM design.
Seli SpA has been active in Double Shield TBM excavations since 1972, and has completed more than 600km and 80 projects with this technology alone. Since 2000 the company has worked with EPBMs, using this technology on many metro projects including Vancouver, Athens, Rome, Turin, Caracas, Sao Paulo, Bangalore, Thessaloniki, Copenhagen and also Hong Kong, among others.
While executing numerous projects, Seli SpA has been active since the 1970s in developing and implementing several new technologies, including:
But despite the many successes, in the last few years a confluence of financial challenges arose that were unrelated to the company’s technical ability or project execution, TunnelTalk has been told. To overcome the impact on business, Seli SpA decided to restructure and pull in fresh funding by selling its TBM contracting division while retaining its TBM, equipment and service activities.
The restructure and divestment sees Seli SpA continuing to exist as a company. It has two subsidiaries – Seli Technologies SpA, which is focused on TBMs; and, Seli Construction SpA through which it had held and divested the contracting division. Seli SpA will continue to offer its equipment manufacturing capability and services on the open market, and continue its own R&D.
In the short-term Seli SpA retains a few long-standing tunnelling projects in its portfolio – projects that were too advanced or at too late a stage to be transferred to Seli Overseas. Principal among these is Cityringen in Copenhagen.