CHEVALIER Development International has secured the main contractor's contract worth more than $1.3 billion from Wheelock Properties for its Diamond Hill project. The project - consisting of a five-block residential and commercial development - is the group's biggest construction project in hand. Chevalier won the contract through wholly owned subsidiary Chevalier Construction. The development is scheduled to finish in 780 days, although the commercial section should be completed in the second half of next year. Group chairman Chow Yei-ching declined to reveal the exact value of the contract at the announcement of the deal after the company's annual meeting yesterday. Bidding for the project, the site of which was bought for $3.53 billion at an auction in February last year, has been a subject of contention because Wheelock had held two tenders for the project. Meanwhile, Chevalier plans to submit bids for two airport projects. Chevalier Development is to bid for a passenger terminal building contract with three other partners - two from Belgium and one from Japan. Parent company Chevalier International Holdings plans to bid for the building services contract with four partners from Hong Kong, Germany, Switzerland and China. 'We have been selected by the Government as one of the companies that will be allowed to tender for the very important and very large airport contracts,' said Mr Chow. Chevalier Development and another company recently won a three-year contract worth more than $250 million from the Water Supplies Department. It involves all water works repair and maintenance services on Hong Kong Island. Apart from the Diamond Hill contract, Chevalier has contracts worth more than $1.4 billion. Deputy managing director Stephen Kuok Hoi-sang said the group's gross margin had improved from a year ago because of the growing number of projects available. 'We now operate at a reasonable margin. With so many tenders open, we've selected the ones where our strengths lie. Therefore our margin has improved.' Chevalier Development is also taking a 32 per cent stake in a US$51 million residential and commercial development project in Shanghai. Mr Chow also said Chevalier (OA) International would return to profitability this year. 'Our CT2 services have started to make a profit,' said Chevalier (OA) deputy managing director Fung Pak-kwan. Paging services were profitable last year, he added. The group has more than 70,000 paging customers and more than 50,000 CT2 clients. Mr Fung said that represented an improvement of 25 per cent on the previous year. He said the company would spend HK$20 million in the next financial year from April 1 to study the feasibility of operating two-way CT2. In addition, it will spend about $10 million every year to expand its CT2 coverage network. Last month, the Chevalier group entered the hotel industry with the signing of a 55 million yuan (about HK$49.72 million) joint-venture agreement with Xinyang Real Estate Authority to develop a three-star, 21-storey, 250-bedroom hotel in Xinyang, Henan province. Chevalier holds a 70 per cent stake in the venture.
