MMC wants to buy railway, inject RM1bil into it

The Star 20/12/2011

PETALING JAYA: MMC Corp Bhd confirmed that it had submitted a proposal to the Minister of Finance Inc (MOF) to undertake a due diligence exercise on KTM Bhd (KTMB) for the purpose of taking over the operations of KTMB.

It said this in a reply to a query by Bursa Malaysia yesterday due to a news report on the subject.

“MOF, vide its letter dated Dec 1, had given its approval for MMC to conduct the said due diligence subject to the signing of a non-disclosure agreement between the parties.

“We will make the appropriate announcement to Bursa Malaysia in accordance with the requirements of the Main Market listing requirements if there are any material developments in this respect,” said MMC.

MMC said yesterday it had embarked on an exercise to take over the loss-making national railway company and planned to inject about RM1bil into KTMB.

http://biz.thestar.com.my/news/story.asp?file=/2011/12/20/business/10125375&sec=business

PTP, Johor port merger plan fails

10 August 2010

The failed rationalisation of the Port of Tanjung Pelepas (PTP) and Johor Port may not affect the performance of MMC Corp much, but it does bring up the question of what will happen to PTP and its expansion plans, reported Business Times.

Combined operations of the two ports contributed about 14 per cent of the group's revenue last year.

MMC Corp made a net profit of US$75.46 million on revenue of $2.67 billion in the financial year ended December 31, 2009.

"I doubt that any analyst has factored in the rationalisation of the two ports into MMC Corp's valuations. So it does not really affect the stock," said an analyst, who declined to be named.

According to OSK Research head of research Chris Eng, PTP has started dredging work for berths 13 and 14 as part of moves to increase the port's capacity. Currently, it has 12 container berths.

However, with only about 78 per cent of the capacity utilised and no added containers or shipping lines to be expected from Johor Port through the rationalisation, there does not seem to be a need for the expansion.

PTP is handling some 6.6 million boxes at present. It has a capacity of 8.5 million TEUs.

"They will have to hold back on expansion plans as there is still some spare capacity to work with now," Eng told Business Times.

He said that this could mean some capital expenditure in Johor Port instead, previously held back pending a decision on the rationalisation of the two ports to ease congestion.

"There are still a couple of bulk berths that can be converted into container berths (for expansion). There is a little bit of room to play for Johor Port," Eng said.

MMC Corp owns 70 per cent of PTP and all of Johor Port. Ever since it bought over Johor Port in 2006, talk of rationalising MMC's port operations has been ongoing.

The plan had been to have PTP focus on containerised cargo, while Johor Port would handle bulk traffic.
It faced fierce opposition, however, from manufacturers who worried about higher transport costs.

KL-Ipoh electric train to run soon

The Star 21-070210 By JAGDEV SINGH SIDHU
Delay in services should not be repeated for remaining portions of rail project

PETALING JAYA: The RM6bil Ipoh-Rawang rail track, which was completed in 2007, is set to see its maiden electric train service to Kuala Lumpur soon.

However, critics have warned against any delay in kicking off operations along the rest of the electrified rail artery in Peninsular Malaysia once construction is completed by the end of 2013.
They said electric train sets (ETS) should be ready for deployment once the Ipoh-Padang Besar stretch is completed by 2013 and the link between Gemas and Johor Baru expected to be ready around the same time, so that billions of ringgit of infrastructure funded by taxpayers did not lay idle and under-utilised.

The embarrassing delay in the start of the new train services along the upgraded Ipoh-Seremban stretch was the result of improper planning but this should not occur again once the remaining double-tracking project in the peninsula is completed. A source said money for new ETS had been allocated under the 10th Malaysia Plan (10MP) and their construction would take about two years.“The lesson from that mistake has been learnt,” he said, referring to the late utilisation of the completed Ipoh-Seremban track. Given that it takes 24 months for the ETS to be built, orders would theoretically go out by the end of next year for the trains to be used on the electrified double tracks once built in three years.

Currently, the MMC Corp Bhd-Gamuda Bhd consortium is upgrading the 329km Ipoh-Padang Besar stretch for RM12.5bil. The RM3.45bil Seremban-Gemas electrified double-tracking project was awarded to Ircon International Ltd and is scheduled for completion in 2012.

The RM8bil Gemas-Johor Baru electrified double-tracking project has been slotted for award under the 10MP.

The understanding is that the project for the Gemas-Johor Baru route, which could be awarded soon, would be completed by 2013. The value of the ETS order should be large, considering that many train sets would be needed to ply along the spine of the peninsula once all three components of the electrified double-tracking project are completed.

Reports indicated that KTM Bhd (KTMB) is set to launch a rail service using ETS soon which would cut the current travel time from Ipoh to Kuala Lumpur to two hours. That service, which is now due to start 2½ years after the electrified tracks were completed, would be extended to Seremban. KTMB was reported to have ordered five six-car ETS for RM250mil in 2007 to service the 300km route between Ipoh and Seremban. The travel time would be reduced by an hour and the ETS can carry 350 passengers, which is 100 more than the current trains do.

KTMB could not be reached for comment.

Power plant upgrades in the works

Dated 16 June 2010.
Business Times

The Energy Commission will soon call for bids to upgrade existing power plants in Peninsular Malaysia for use from 2015 onwards.

"Malaysia's power consumption increases by 3 per cent every year.
By 2015, we'll need 800 megawatts (MW) more power and
by 2017, a further 1,000MW,"
said Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui."If we don't plant up, we'll face brownouts," he told Business Times in Kuala Lumpur yesterday. Brownouts refer to the drop in voltage in electrical power supply.Malaysia's electricity reserve margin could fall below the 20 per cent threshold if there are no efforts made to boost production capacity.The future power supply in the peninsula is at risk after it was confirmed that electricity from the Bakun hydroelectric plant in Sarawak will only be used to meet the state's power needs.

Malaysia now has an installed capacity of 22,000MW.

It was reported that MMC Corp Bhd is keen to spend as much as US$1 billion (RM3.26 billion) to expand its 2,100MW Tanjung Bin power plant by another 800MW.

Similarly, Tenaga Nasional Bhd is seeking to raise capacity of its Manjung facility by 2,000MW from its current 2,100MW, at an estimated cost of between RM6 billion and RM7 billion. (USD1.84b to USD2.15b)

Under the 10th Malaysia Plan (2011 to 2015), the government plans two power plant upgrades in Peninsular Malaysia and construction of a new one in Lahad Datu in Sabah.

"So far, power plant operators in Perak, Negri Sembilan and Johor have indicated their interest to expand capacity," Chin said.

"We're only planning for two here, so we'll call for bids. The Energy Commission will make the necessary preparation," he added.

(Blogger's query: So where will the two upgrades be located? Manjung, Tg Bin, or NS?)

12 weeks to conduct RM36bil MRT feasibility study

The Star 9/7/2010

Consultants said to advise Govt on four main aspects including suitability and cost

PETALING JAYA: The feasibility study on the proposed RM36bil mass rapid transit (MRT) system by Gamuda Bhd and MMC Corp Bhd is expected to be presented to the Government in about three months time, said a source familiar with the matter.
It was earlier reported that the Government had appointed two independent consultants – Minconsult Sdn Bhd and Andercon Technologies Ltd – to carry out the study.

The source said the consultants had been given a period of 12 weeks to revert and present their recommendations on the project to the Government. “They are to review and advise the Government on the MRT proposal in relation to its suitability with policy objectives, strategies on public transport, socio-economic benefits as well as its feasibility and cost,” it said.

It is understood that the consultants have been hired by the Finance Ministry in consultation with the recently-formed Land Public Transport Commission or SPAD.
Minconsult was involved in the bridge maintenance and management system study for phase 1 of the Star LRT project. SPAD is supposed to coordinate, integrate and regulate all public transport systems in the country as well as come up with a masterplan.

Previous reports indicated that the MRT project might start as soon as early next year.
To recap, MMC and Gamuda in a joint venture, had submitted a proposal dubbed the Klang Valley integrated transportation system, which was presented to the Economic Council in February. The proposed MRT network consists of two radial lines and a circle line, which has similarities with the train networks in most major cities. It is commonly known as a “wheels and spokes” concept. In total, the MRT network will cover up to 150km of lines, with about a third of them to be built underground.

Although analysts are generally positive about the project, questions remain as to whether the Government can afford such a massive project. It is also left to be seen if the Gamuda-MMC proposed MRT project will be part of SPAD’s public transport masterplan

Minconsult is multi-disciplinary engineering and project management company that offers a wide range of engineering consultancy services in the civil and structural, mechanical, electrical, petrochemical and environmental fields. The company was involved in bridge maintenance and management system study for KTMB Bhd, Phase 1 of Star LRT system (now Ampang Line) and the feasibility study for the proposed Kota Damansara-Central Business District-Cheras LRT line, according to its website.
Andercon is a Canada-based company specialising in installing, configuring, and administering Oracle database infrastructures.

Tenaga to bid for US$2.1b power project

18-06-2010

Tenaga Nasional Bhd, Malaysia’s state-controlled generator, will bid for a RM7 billion (US$2.1 billion) government project to upgrade power plants as the economic recovery boosts electricity demand.Construction of a new coal-fired plant at the utility’s existing station in Manjung would start in early 2011 and be completed by the end of 2014, president Che Khalib said in an interview at the company headquarters in Kuala Lumpur yesterday.Malaysia’s Energy Commission will soon call for bids to upgrade power plants by 2015 as the electricity reserve margin could fall below 20 per cent if capacity isn’t increased, the Business Times reported on June 16, citing Energy Minister Peter Chin. Power demand may rise by as much as five per cent a year in the next five years, in step with the government’s target of six per cent annual growth through 2015, Che Khalib said.

Tenaga may have to compete for the project with MMC Corp, Malaysia’s second-biggest electricity producer, and Jimah Energy Ventures, an independent power producer with a 25-year licence to operate a 1,400-megawatt coal-fired plant near Port Dickson in the southern state of Negri Sembilan.If Tenaga wins the bid, it may sell bonds in the middle of 2011 to help finance the project, Tenaga president Che Khalib said in an interview in Kuala Lumpur yesterday. “The usual funding structure will be 20 per cent equity and 80 per cent debt, so probably around RM4 billion to RM5 billion kind of debt-raising” would be needed.Tenaga shares rose 0.2 per cent to RM8.37 at 10:39 a.m. on the Malaysian stock exchange, headed for the highest close since May 19. They’ve dropped 0.4 per cent this year, lagging behind the benchmark index’s 3 per cent gain in the same period.

The government is planning 52 infrastructure and development projects worth RM63 billion over the next five years, including two coal-fired power plants, Prime Minister Datuk Seri Najib Razak said on June 10. The contracts will be put up for open tender, he said. -- Bloomberg

MMC unit has RM6b orderbook

29/04/2010

MMC Corp, a Malaysian ports, power and construction group, said its engineering and construction division has an orderbook of RM6 billion (US$1.9 billion).

Its RM12.5 billion double-tracking electric rail project is “progressing well” with 40 per cent completed up to March, the company said in a statement today. This is a joint venture with Gamuda Bhd.

MMC Corp also said the government may ask it to e x p a n d its Tanjung Bin coal-fired power plant, the company said in a statement today.

Meanwhile, Aliran Ihsan Resources Bhd, a water treatment unit of MMC, is seeking to e x p a n d its business beyond Johor.



The company is in advanced negotiations with several other Malaysian states on this initiative, MMC said. -- Bloomberg

MMC may clinch US$5b Saudi job

MMC may clinch US$5b Saudi job
By Sharen Kaur
Published: 2008/10/16

The infrastructure group is awaiting the completion of the bid for an independent water and power project and will know the result by December

INFRASTRUCTURE group MMC Corp Bhd is in the running to win a US$5 billion (RM17.6 billion) independent water and power project (IWPP) in Saudi Arabia.Director and chief executive officer Hasni Harun said MMC is part of a consortium with a Saudi Arabian and an international firm that has been named preferred bidder for the project, which will have capacity to produce one million cubic metres (m3/day) of water per day and 1,100 megawatts (MW) of electricity ."We are close to completion (of the bid) and will know the result by December. We are now waiting for the financial close," Hasni told reporters after its shareholders meeting in Kuala Lumpur yesterday. "Looking at the liquidity in the Middle East, we are quite confident that there are funds available in Saudi Arabia to make the project bankable," he added.

MMC and its two partners have an equal shareholding in the consortium that will hold a 25- to 30-year concession for the plant, which will take four years to build.The project follows MMC's achievements in power and water projects in the Middle East.MMC, via 51 per cent-owned unit Malakoff Bhd, has a concession in the 900MW and 1,030,000 m3/day Shuaibah IWPP in Saudi Arabia and a 200,000 m3/day seawater desalination plant in Algeria. It also has interests in Central Electricity Generation Co in Jordan and Dhofar Power Co in Oman.In July this year, it won exclusive rights to undertake a study to build a US$2 billion (RM7 billion) coal-fired power plant of up to 1,000MW in Ajman in the United Arab Emirates.MMC is tipped to win the Ajman job, subject to a technical and economic feasibility study it is undertaking.It is learnt that MMC will form a consortium to operate and maintain the plant for 20 years, which will contribute positively to its financial figures.

Meanwhile, Hasni said MMC's offer to acquire more than 50 per cent equity in Aliran Ihsan Resources Bhd (AIRB) for up to RM238.6 million will spearhead plans to bid for more lucrative utilities and infrastructure projects overseas, especially in the Middle East.AIRB is a Johor-based water treatment plant operator with 16 plants under its belt, supplying about 70 per cent of the state's water needs."The acquisition will be our spring board to hold more water assets. We may take some equity stakes, get involved in water treatment plants and form joint ventures," Hasni said.He said the acquisition is the first move by MMC to be involved in the water business domestically and will be a strategic fit.It will complement MMC's global power generation business, particularly in the Middle East and North African regions, where power project bidders are invariably required to provide water solution proposals in their bids."We intend to keep AIRB's listing status and grow the business in terms of size, people and market capitalisation," Hasni said.

MMC's debt stands at RM20 billion, of which RM1.3 billion comes from the holding company and another RM16 billion from subsidiary Malakoff Bhd.

Electrified rail job may be scaled down

Electrified rail job may be scaled down
BTImes
Published: 2008/09/27

The northern track does not need a high-speed train service, as it is mostly cargo trains which ply the route rather than those carrying passengers


THE government is thinking of doing away with the electrification work for the double-tracking railway project from Butterworth to Padang Besar.It was learnt that the northern track does not need a high-speed train service as it is mostly cargo trains which ply the route rather than those carrying passengers."We have not really received any request from the government. But we were told that there is a possibility that the government wants to reduce the scope of work between Butterworth and Padang Besar," MMC Corp Bhd chief executive officer Hasni Harun said.MMC is partnering Gamuda Bhd to carry out the electrified double-tracking project. They are awaiting official word from Keretapi Tanah Melayu Bhd before starting talks with the government on whether to continue the project on a smaller scale.
On the impact will be if the scope of work is reduced, Hasni said: "A few hundred million (ringgit), but it will not affect our bottom line."

Tenders may be called

Tenders may be called
Published: 2008/06/16
BTimea

DRB-HICOM and IJM Corp may bid for the RM8 billion contract to lay rail tracks connecting Gemas to Johor Baru, says an industry source

THE government may call for tenders for the Gemas-Johor Baru railway project by the year-end, says a government source.A source from the Ministry of Transport said it was in the government's interest to complete the southern portion of the country's electrified double tracks."The government will call for tenders, but this is subject to the mid-term review."The single tracks are now running from Singapore to Kuala Lumpur and from Kuala Lumpur to Butterworth. So the whole stretch of the double tracks must be completed to improve efficiency," he told Business Times.

An industry source said that DRB-HICOM Bhd and IJM Corp Bhd may bid for the RM8 billion contract to lay new rail tracks connecting Gemas in Negri Sembilan to Johor Baru.DRB-HICOM, a car and banking group that also has expertise in engineering, is expected to submit a detailed proposal comprising design, layout and cost structure to the government in the second half of the year."DRB-HICOM is keen to work on the double tracks. They may either work with a local or foreign party in securing the contract or bid for it on their own," the source said.The source said DRB-HICOM had previously made a presentation to the government for the project late last year.Key executive officials of DRB-HICOM were not available for comment at press time.The project involves building over 200km of parallel railway tracks, including stations, depots, halts, yards and bridges.Work will also cover systems such as electrification, signalling and communications.

Both DRB-HICOM and IJM are experienced in railway work.IJM is one of three sub-contractors for the RM3.45 billion Seremban-Gemas double-tracking railway project.IJM managing director Datuk Krishnan Tan Boon Seng, however, told Business Times through e-mail that IJM was not involved in any submission for the Gemas-Johor Baru stretch.DRB-HICOM, meanwhile, was a main contractor for the RM4.6 billion Rawang-Ipoh double-tracking project awarded in 2000.However, the project faced delays and the government eventually asked UEM Builders Bhd to complete it.The Rawang-Ipoh project was finally completed last year.Malaysia's other double-tracking project is the RM12.5 billion rail link between Ipoh and Padang Besar. This is being done by Gamuda Bhd and MMC Corp Bhd, and slated for completion in 2013.