Ranhill to undertake RM720m hospital project

By Sharen Kaur
BTimes
Published: 2008/10/11

BUILDER Ranhill Bhd has been asked by the government to undertake work on the Women and Children's Hospital Package 2 project in Kuala Lumpur worth RM720 million as a private financing initiative (PFI).The decision to complete the hospital project on a PFI basis instead of government financing was made in July due to lack of funds for it under the Ninth Malaysia Plan (9MP), a source close to the company said.It is learnt that Ranhill is currently preparing the PFI contract to be negotiated with the Ministry of Health.Ranhill Group president and chief executive officer Tan Sri Hamdan Mohamad and executive director and executive vice president Datuk Chandrasekar Suppiah were unavailable for comment.

The RM720 million Package 2 contract involves piling, superstructure, mechanical and electrical, clinical and non-clinical fit-out works, and building a 13-storey hospital on the premises of the current 2,350-bed Hospital Kuala Lumpur.Ranhill is expected to start work in December or after getting approval from the Ministry of Health, and complete the project by late 2011 or early 2012.The source said, however, that the cost has gone up by about 20 per cent due to additional equipment required and higher financing cost."Ranhill will be paid progressively for its work on the hospital project, therefore, its performance for the current year should also improve," the source said.Ranhill has completed Package 1, worth RM16 million, which involved demolishing existing buildings and diverting services at the General Hospital to pave the way for the construction of Package 2.

Blogger's Note: How can PFI projects be paid progressively? PFI means the contractor raises the fund to finance, build and complete the project. Then the Govt will start paying the contractor.