Denis O’Brien’s Sierra closing on state contracts in Papua New Guinea
Move part of strategy to position company as ‘sister’ to Digicel
Siteserv, a construction services conglomerate assembled during the boom by Niall McFadden, was acquired by Denis O’Brien last year for €45 million
Sierra Support Services, which is owned by Denis O’Brien’s Siteserv group, is closing in on up to $30 million worth of state contracts in Papua New Guinea (PNG), where Mr O’Brien’s Digicel is the largest mobile operator.
The push for business in the Pacific island state is part of a strategy to position Siteserv as a “sister company” to Digicel, which has about 13 million subscribers across the Caribbean and neighbouring regions.
Sierra was this week named as preferred bidder for a $15 million contract to design and build a high-speed fibre network in PNG, which will be strung above ground on electricity poles across the mountainous nation.
That contract is expected to be signed at the end of next week. Sierra said it is also in talks with PNG state agencies over contracts for several other infrastructural projects, which Sierra estimates will give it a total of $30 million of new business in the island state.
A delegation of senior executives from Sierra will depart for PNG this weekend to finalise the fibre contract with Independent Public Business Corporation (IPBC), the agency that oversees all semi state companies in the country.
Sierra will use the country’s existing electricity infrastructure to build the high-speed network, which will operate as a “backbone network” for broadband and other telecommunications companies in PNG, such as Digicel.
ESB is currently working on plans to build a similar fibre network, strung across its electricity poles in Ireland. Sean Corkery, the Siteserv chief executive, recently told The Irish Times it hopes to become involved in the ESB project.
Sierra won the PNG contract from a shortlist of three companies, including two local operators. TJ Malone, Sierra’s chief executive who formerly worked for Mr O’Brien at Esat Telecom, said it had been working on its pitch for the contract for six months.
“We opened an office in PNG 12 months ago when we became aware, on the back of Digicel’s involvement here, that a there would be a lot of infrastructural investment,” said Mr Malone.
“We were introduced to a lot of the key decision-making people in PNG. We now intend to grow our operations here up to about 120 staff.”
Sierra plans to open a “training school” in PNG to upskill local workers to help it build the network. Mr Malone said the company has agreed with IPBC to allow the state agency use the training centre to train other workers.
“We are already talking to them about other contracts in the telecommunications sphere and also to work on overhead power lines,” said Mr Malone.
He said Sierra and Siteserv will continue to “follow the Digicel footprint” to chase new business across the region.
“Digicel has given us the foresight [to win new business in the region] . We now have 100 staff in Jamaica [where Digicel is headquartered] and we are in detailed discussions for more contracts there. We are also looking at projects in Guyana and Haiti, ” he said.
Siteserv, a construction services conglomerate assembled during the boom by Niall McFadden, was acquired by Mr O’Brien last year for €45 million, following a controversial €90 million debt write off from Irish Bank Resolution Corporation.
The company has grown swiftly since Mr O’Brien bought it last year. In the first 11 months of his ownership, according to its accounts, it made €9 million in profits and had sales of about €202 million, an increase of 9 per cent.