KEB nears RM4.5b loan deal for highway project

KEB nears RM4.5b loan deal for highway project
By Azlan Abu Bakar
Published: 2008/12/01
BT

Kumpulan Europlus Bhd (3565) is close to securing a RM4.5 billion loan from a group of banks to build the West Coast Expressway (WCE), which links Banting in Selangor to Taiping, Perak. "The current weak global economy has affected efforts in getting the money earlier," a company official said, declining to disclose further details.However, it is unclear if KEB will get to keep the highway. The Economic Planning Unit (EPU) declined comment when contacted.On November 12, EPU director Tan Sri Dr Sulaiman Mahbob said the WCE could be re-tendered as the consortium involved had failed to secure financing in time.

It was reported that the WCE would cost around RM3 billion. However, the fact that KEB wants to borrow a lot more could be due to the rise in cost of raw materials.KEB's 60 per cent subsidiary, Konsortium LPB Sdn Bhd (KLPB), was awarded the WCE concession on May 25 2007.KLPB's other shareholders are Kumpulan Darul Ehsan Bhd and Putera Capital Bhd, each holding a 20 per cent stake.

Construction work on the 250km highway was supposed to start last June."We have already checked the status of the highway project with the Works Ministry and were told it has not been cancelled," the company official said when contacted by Business Times.Phase 1 which involves the stretch between Tanjung Karang and Banting was targeted to be completed by 2011, while Phase 2 that involves the stretch between Taiping and Sabak Bernam is initially scheduled to begin in 2010 and completed by 2013.The highway will run parallel to a stretch of the North-South Expressway.Under the concession agreement, the WCE will be built and tolled by KLPB for 33 years before the highway is transferred to the government.