Multinational ambition of Seli Overseas 20 May 2015

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.

Factory test of Cityringen TBMs at Seli factory in Aprilia (2012)

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.

Old hands, new beginnings

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.

Seli Overseas involved in Doha Metro construction

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.

Seli Overseas – Projects

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 – expanding business

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.