Granite Launches Major Infrastructure Project to Enhance SR 58/SR 99 Interchange in Bakersfield

Rhea-AI Summary

Granite (NYSE:GVA) has been awarded a $27 million contract by the City of Bakersfield to enhance the SR 58/SR 99 interchange. The project, funded by the City and the Thomas Roads Improvement Program, includes widening the bridge over SR 99 and building a new bridge spanning Wible Road. Key components comprise:

• Four retaining walls
• 2,830 cubic yards of continuously reinforced concrete pavement
• 3,000 linear feet of concrete barrier rail
• 14,300 cubic yards of import borrow
• A comprehensive drainage package

Granite's Solari plant will supply materials for the project. Construction is scheduled to begin in November 2024 and be completed in May 2026.

Positive

• Awarded a $27 million contract for a major infrastructure project
• Project included in Granite's third-quarter CAP
• Strengthens relationship with the City of Bakersfield
• Provides opportunity for Granite to leverage its structures component expertise
• Utilizes Granite's nearby Solari plant for material supply

Negative

• None.

Insights

Infrastructure Analyst

This $27 million contract for Granite to enhance the SR 58/SR 99 interchange in Bakersfield is a significant win for the company. The project scope, including bridge widening and construction, demonstrates Granite's expertise in complex infrastructure work. The use of Granite's nearby Solari plant for material supply showcases vertical integration, potentially improving profit margins. With construction set to begin in November 2024 and last until May 2026, this project provides a steady revenue stream and workload visibility for the next 2.5 years. The contract's inclusion in Granite's third-quarter CAP suggests it was anticipated, indicating strong project pipeline management. This project reinforces Granite's position in the Bakersfield market and could lead to future opportunities in the region.

Financial Analyst

The $27 million contract is a positive development for Granite, representing about 0.74% of its $3.66 billion market cap. While not transformative, it contributes to the company's backlog and revenue stability. The project's 18-month duration provides predictable cash flow through 2026. Granite's ability to self-supply materials through its Solari plant may enhance profit margins, though the exact impact isn't quantified. The contract's inclusion in the Q3 CAP suggests it was factored into recent financial projections. Investors should note that such infrastructure projects, while steady, typically have lower margins compared to more specialized construction work. Overall, this contract reinforces Granite's core business model and market position in California's infrastructure sector.

WATSONVILLE, Calif.--(BUSINESS WIRE)-- Granite (NYSE:GVA) has been awarded an approximately $27 million contract by the City of Bakersfield to enhance the connectivity and efficiency of the State Route 58/State Route 99 (SR 58/SR 99) interchange in Bakersfield. Project funding is to come from the City of Bakersfield and the Thomas Roads Improvement Program (TRIP) and was included in Granite’s third-quarter CAP.

The project includes the widening the bridge over SR 99, which will be added to the existing east bound SR 58 bridge. A new bridge will also be built spanning Wible Road, connecting directly to north bound SR 99.

Key components of the project include:

• Four retaining walls
• 2,830 cubic yards of continuously reinforced concrete pavement (CRCP)
• 3,000 linear feet of concrete barrier rail
• 14,300 cubic yards of import borrow
• A comprehensive drainage package

“We are excited to continue our strong relationship with the City of Bakersfield by providing an essential upgrade to one of the most significant intersections in the city,” said Larry Camilleri, Granite Vice President of Regional Operations. “This project represents a strong anchor job in the heart of the Bakersfield home market and includes a large structures component, which Granite can strategically leverage to continue pursuing excellence and growth in the area.”

Granite’s nearby Solari plant will supply 4,000 tons of HMA, 7,000 tons of Class II base, and 14,300 cubic yards of import materials.

Construction is expected to begin in November 2024 and be completed in May 2026.

About Granite

Granite is America’s Infrastructure Company™. Incorporated since 1922, Granite (NYSE:GVA) is one of the largest diversified construction and construction materials companies in the United States as well as a full-suite civil construction provider. Granite’s Code of Conduct and strong Core Values guide the Company and its employees to uphold the highest ethical standards. Granite is an industry leader in safety and an award-winning firm in quality and sustainability. For more information, visit the Granite website, graniteconstruction.com, and connect with Granite on LinkedIn, X, Facebook, and Instagram.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241022530177/en/

Granite Contacts

Media

Erin Kuhlman 831-768-4111

Investors

Wenjun Xu - 831-761-7861

Source: Granite

FAQ

What is the value of Granite's contract for the SR 58/SR 99 interchange project in Bakersfield?

Granite (NYSE:GVA) has been awarded an approximately $27 million contract for the SR 58/SR 99 interchange enhancement project in Bakersfield.

When is the construction of the SR 58/SR 99 interchange project expected to begin and end?

Construction of the SR 58/SR 99 interchange project is expected to begin in November 2024 and be completed in May 2026.

What are the main components of Granite's SR 58/SR 99 interchange project in Bakersfield?

The main components include widening the bridge over SR 99, building a new bridge spanning Wible Road, four retaining walls, concrete pavement, barrier rail, import borrow, and a comprehensive drainage package.

How will Granite (GVA) supply materials for the SR 58/SR 99 interchange project?

Granite's nearby Solari plant will supply 4,000 tons of HMA, 7,000 tons of Class II base, and 14,300 cubic yards of import materials for the project.