SINGAPORE - Singapore Technologies Engineering (ST Engineering), through its subsidiary Urban Solutions, has clinched a $1.4 billion contract to provide turnkey rail services for the new Kaohsiung MRT Yellow Line in southern Taiwan.

The deal includes providing rail electronics solutions as well as above-ground train depot design, construction and equipment fit-out.

The contract, which was awarded to Urban Solutions as part of a consortium, will also see the ST Engineering unit spearheading overall project management and serving as the systems integration lead, said the group in a bourse announcement on Thursday.

ST Engineering will also provide the communications system, automatic fare collection system, platform screen doors, traction electrification system, depot design and construction, and depot maintenance equipment for the Yellow Line. Works are expected to start by late 2022 over a period of 10 years.

"Winning this landmark Yellow Line project demonstrates the industry's confidence in our unique strengths and attests to our capability in moving up the value chain to deliver full turnkey rail services, systems integration and project management," said Mr Chew Men Leong, president of Urban Solutions at ST Engineering.

ST Engineering said the contract is not expected to have a material impact on its net tangible assets per share and earnings per share for the current financial year.

The Yellow Line is Kaohsiung's newest rail infrastructure programme. It runs along a 22.8km route that comprises 23 stations. When completed, it will link the city's existing red and orange lines and improve connectivity to Kaohsiung's six key districts, universities and schools. Ridership for the new line is estimated at about 1.2 million, which translates to nearly 42 per cent of the city's total population.

"This significant win following our Kaohsiung MRT Red Line North Extension contract reinforces our position as a global Smart City participant and brings us closer to achieving our Smart City growth ambitions," said Mr Chew.

Shares of ST Engineering were trading up five cents, or 1.3 per cent, at $3.78 as at 10.39am on Thursday after the contract announcement. THE BUSINESS TIMES