Question-and-Answer Session
Operator
[Operator Instructions]. Your first question comes from [William Raleigh of Wayne Wright].
William Raleigh - Wayne Wright
Good afternoon. I was wondering if you could discuss the backlog year-over-year. I know you don't like to talk about it in the quarters, but how did it end up for the year and what I should see going forward?
Brian Lin
We have a very solid customer base. Our clients are typically large clients and our projects most often amounts to two years for a large project. So, with this, our nature of business when it comes to the total solutions, we will have a backlog in the company. So, for 2005 we have got a $24 million unrecognized revenue carried over to 2006. And in 2006, we’ve got $29 million unrecognized revenue carried over to 2007.
William Raleigh - Wayne Wright
Could you also talk about whether there are some projects in the new areas, the new industry sectors that you want to go forward in, such as transportation and tobacco and wine, and the other areas that you were looking forward to?
Brian Lin
Yeah. Maybe I can just use the example of a project in road tunnel. We signed a contract for $3.2 million. We leverage that for a fire protection system, total solution project for a road tunnel, which is across the Yangtze River. So, that's a great opportunity for us, because in the transportation industry the fire protection has really low fire specifications yet. And we have used our own research and development team to come out with this design, and so we won the project.
At the same time, we are also participating in the international testing joint efforts organized by National Research Centre of Canada, where we are actually participating in that to jointly find out what is the absolute solution. The participants in that joint testing are companies like Tyco, like Siemens, Omniware, etcetera. These are all multinational companies. But hopefully, with the joint testing, we would be able to see the fire specifications for China's testing industry.
William Raleigh - Wayne Wright
Alright. And just one last question. In the second half of the year, your gross margin was suppressed relative to the first. Do you see that coming back as soon as the first half of this year?
Brian Lin
Yeah, I think in this business, we as a general contractor have a very good client base. Sometimes our clients want us to do a little bit more. And they trust us and so we would sell to them not only our own products, but also source products from third parties to come out with a complete system. So, sometimes our margin gets depressed not because they are selling our own products cheaper, but there is a competition of the product that makes the gross margin look less.
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