Lavalin gets $597M US job in Chavez's Venezuela

The government of Hugo Chavez, a populist with oil money to spend, has hired Montreal's SNC-Lavalin Group to build an irrigation system and three new towns in Venezuela's central plains.

Montreal firm to build houses, roads, irrigation system for new towns

The government of Hugo Chavez, a populist with oil money to spend, has hired Montreal's SNC-Lavalin Group to build an irrigation system and three new towns in Venezuela's central plains at a cost of $597 million US.

Venezuelan President Hugo Chavez enjoys criticizing Washington while financing government projects through oil sales to the United States. ((Fernando Llano/Associated Press))

The Venezuelan president, who misses few chances to criticize the administration of President George W. Bush while selling billions of dollars worth of oil to the United States, has a strong political base among his country's poor.

Lavalin, an engineering and construction giant with annual sales of more than $5 billion Cdn, announced the three-year contract Wednesday. Its share price was up 12 cents to $44.27 in midday trading on the Toronto Stock Exchange.

"This project is going to improve the quality of life for approximately 16,000 people by providing 2,000 new homes, as well as schools, medical facilities and the basis for regular employment," a Lavalin executive vice-president, Riadh Ben Aissa, said in a statement.

As part of the job, the company is to extend an existing irrigation canal by 12.8 kilometres and add 32 kilometres of branches and conduits in the Tiznados district, about 300 kilometres south of Caracas.

It is to install gates, farm intakes and other waterworks supplying 32,200 hectares and equip 10,000 hectares with on-farm drip and spray systems.

SNC-Lavalin three-month chart

It is also to supply warehouses, silos and other structures; set up agricultural training courses; build 80 kilometres of paved and dirt roads and design and construct the new towns of Guaitoco, San Francisco and San José de Tiznados.