Passenger Rail, Rolling stock & Rail Vehicle Design

Downer reveals hefty cost of bidding for big contracts

New Intercity Fleet

Engineering group Downer has revealed the cost of doing business in today’s major transport project space, reporting the cost of its failed bid to deliver the New South Wales New Intercity Fleet contract.

Downer was part of a consortium which bid for the NIF contract, advancing to the shortlist late last year.

The contract was awarded last week to a consortium including UGL, Hyundai Rotem and Mitsubishi.

Downer’s share of the bidding process came at a cost of $10 million ($7 million after tax). The company disclosed the figure to shareholders on August 18.

“Downer announced on 4 August 2016 that it was targeting net profit after tax of around $170 million for the 2017 financial year,” the company said.

“As a consequence of expensing the bid costs associated with the New Intercity Fleet, Downer’s NPAT target for the 2017 financial year is now $163 million.”