KUALA LUMPUR, Nov 27 – The Pahang-Selangor water transfer project hangs in the balance over the question of whether the Malaysian government or Japan has the final say on which consortium is awarded the lucrative contract to bore a 45km tunnel through the Titiwangsa Range. At stake also is a RM2.5 billion soft loan from the Japan Bank for International Cooperation (JBIC).
The Malaysian Insider has learnt that the Cabinet and officials from the Ministry of Energy, Water and Communications are resisting attempts by the Japanese International Cooperation Agency to influence the choice of the successful bidder for the contract. Government officials have been tight-lipped about the behind-the-scenes wrangling but Datuk Joseph Salang Gandum’s comment in Parliament last week gave a hint of the seriousness of the issue.
When asked to give an update on the soft loan from Japan Bank for International Cooperation (JBIC) and the status of the water transfer project, he remarked: “Malaysia is a sovereign country and will not sell its dignity and name…the government already has plans if the money is not channelled to us due to certain reasons.”
Checks show that three bids for the project were received from: Shimizu-Nishimatsu-UEM-IJM; Taisei-HRA Teguh and Kajima Construction. From the start, the government made it clear that tender for the water transfer project should be a benchmark for open tenders in the country. The Ministry of Energy, Water and Communications came up with an international competitive bidding scheme to select a international consultants who would scrutinise the bids. It is understood that two of the bidders submitted conditional bids.
Under the international tender process, any company or party that submits a conditional bid should be disqualified. This is because the price quoted in the conditional bid could change substantially. For example, the lowest bidder for the 45-km tunnel job submitted a conditional bid that was based on a particular rock strength of the tunnel. But independent reports obtained by the government suggest that the rock strength is higher than what the cost estimates are based on.
As such, the government believes that it could be saddled with a variation order of several hundred million ringgit if it awards the contract to the consortium with the lowest bid.
It is in favour of awarding the contract for the project to the company which had submitted the second lowest bid, which was also the only bidder who did not submit a conditional tender.
But JICA is insisting that the contract be awarded to the lowest bidder.
The Malaysian Insider understands that the Cabinet was briefed on the stand off and supports the decision of the Energy, Water and Communications ministry to award the contract to the second bidder.
A government official told The Malaysian Insider: “The terms in the bid documents state clearly that we are not bound to accept the lowest bid but must take into account all factors in the tender. Accepting a conditional bid could be disastrous for the government. Based on our research, there is every chance of a variation order between RM200 million to RM400 million.” It is understood that the difference between the lowest and second bid is RM150 million. JICA has apparently asked the government to negotiate with the party with the lowest tender and get them to remove the “variable component” of the bid.
Government officials believe that going down this path could lead to suits by the two other companies that took part in the tender process. The reason: there is a clause which states that no party can alter, correct or withdraw anything from their bid documents once it has been opened and evaluated.
So the standoff continues. But it is learnt that government officials are willing to forego the Japanese loan. “This is an issue of sovereign rights. Malaysia will be a joke if we have a open tender but don’t follow the rules of the game.” It is unclear how the government plans to raise the RM1.5 billion for the tunnel project if the loan falls through.
Thursday, November 27, 2008
Tuesday, November 25, 2008
Malaysia to start giving out RM600m jobs soon
Published: 2008/11/25
BT
By March 2009, about 80 to 90 per cent of the people-centric infrastructure projects will have been awarded to contractors, says the Implementation Coordination Unit
THE government will, from next month, start awarding to contractors RM600 million worth of small infrastructure projects identified under the RM7 billion economic stimulus package.Tan Sri Khalid Ramli, director-general of the Implementation Coordination Unit (ICU), said the projects are people-centric, involving the building of basic infrastructure such as roads, jetties and drains.As such, he said, it is vital that they be implemented immediately."Speed is of the essence. You're talking about stimulating domestic growth, so it's very urgent that the projects are implemented fast.
"I'm determined to see part of this RM600 million kick off in December," Khalid said in an interview yesterday.He anticipates that by March next year, about 80 to 90 per cent of these projects would have been awarded to contractors.The ICU, which falls under the Prime Minister's Department, has specifically been tasked to ensure implementation of these projects."We're talking about a vigorous pace of implementation. So perhaps after December, January, February, all these projects must be awarded by this time. Then only you get the effect," he said.Projects will be awarded in several ways, including procurements, tenders and quotations, he added.
BT
By March 2009, about 80 to 90 per cent of the people-centric infrastructure projects will have been awarded to contractors, says the Implementation Coordination Unit
THE government will, from next month, start awarding to contractors RM600 million worth of small infrastructure projects identified under the RM7 billion economic stimulus package.Tan Sri Khalid Ramli, director-general of the Implementation Coordination Unit (ICU), said the projects are people-centric, involving the building of basic infrastructure such as roads, jetties and drains.As such, he said, it is vital that they be implemented immediately."Speed is of the essence. You're talking about stimulating domestic growth, so it's very urgent that the projects are implemented fast.
"I'm determined to see part of this RM600 million kick off in December," Khalid said in an interview yesterday.He anticipates that by March next year, about 80 to 90 per cent of these projects would have been awarded to contractors.The ICU, which falls under the Prime Minister's Department, has specifically been tasked to ensure implementation of these projects."We're talking about a vigorous pace of implementation. So perhaps after December, January, February, all these projects must be awarded by this time. Then only you get the effect," he said.Projects will be awarded in several ways, including procurements, tenders and quotations, he added.
Malaysia to start giving out RM600m jobs soon
Published: 2008/11/25
BT
By March 2009, about 80 to 90 per cent of the people-centric infrastructure projects will have been awarded to contractors, says the Implementation Coordination Unit
THE government will, from next month, start awarding to contractors RM600 million worth of small infrastructure projects identified under the RM7 billion economic stimulus package.Tan Sri Khalid Ramli, director-general of the Implementation Coordination Unit (ICU), said the projects are people-centric, involving the building of basic infrastructure such as roads, jetties and drains.As such, he said, it is vital that they be implemented immediately."Speed is of the essence. You're talking about stimulating domestic growth, so it's very urgent that the projects are implemented fast.
"I'm determined to see part of this RM600 million kick off in December," Khalid said in an interview yesterday.He anticipates that by March next year, about 80 to 90 per cent of these projects would have been awarded to contractors.The ICU, which falls under the Prime Minister's Department, has specifically been tasked to ensure implementation of these projects."We're talking about a vigorous pace of implementation. So perhaps after December, January, February, all these projects must be awarded by this time. Then only you get the effect," he said.Projects will be awarded in several ways, including procurements, tenders and quotations, he added.
BT
By March 2009, about 80 to 90 per cent of the people-centric infrastructure projects will have been awarded to contractors, says the Implementation Coordination Unit
THE government will, from next month, start awarding to contractors RM600 million worth of small infrastructure projects identified under the RM7 billion economic stimulus package.Tan Sri Khalid Ramli, director-general of the Implementation Coordination Unit (ICU), said the projects are people-centric, involving the building of basic infrastructure such as roads, jetties and drains.As such, he said, it is vital that they be implemented immediately."Speed is of the essence. You're talking about stimulating domestic growth, so it's very urgent that the projects are implemented fast.
"I'm determined to see part of this RM600 million kick off in December," Khalid said in an interview yesterday.He anticipates that by March next year, about 80 to 90 per cent of these projects would have been awarded to contractors.The ICU, which falls under the Prime Minister's Department, has specifically been tasked to ensure implementation of these projects."We're talking about a vigorous pace of implementation. So perhaps after December, January, February, all these projects must be awarded by this time. Then only you get the effect," he said.Projects will be awarded in several ways, including procurements, tenders and quotations, he added.
Contruction boom is over for Dubai
Published: 2008/11/25
DUBAI:The United Arab Emirates (UAE) began to bail out and consolidate Dubai's rattled banking sector and curb a building frenzy yesterday as the former boomtown started cutting state spending in the face of the global crisis. In a major policy shift, the federal government will inject capital into Emirates Development Bank, a newly created rescue vehicle preparing to absorb merging Islamic lenders Amlak and Tamweel. And in what marks the end of an era for Dubai, Mohamed Alabbar, a member of the emirate's ruling council, said the emirate would now pare its construction ambitions back in anticipation of waning demand after spending the past five years building as much property as fast as possible. He assured investors the Gulf's regional financial hub of Dubai was able to meet its sovereign obligations. - Reuters
DUBAI:The United Arab Emirates (UAE) began to bail out and consolidate Dubai's rattled banking sector and curb a building frenzy yesterday as the former boomtown started cutting state spending in the face of the global crisis. In a major policy shift, the federal government will inject capital into Emirates Development Bank, a newly created rescue vehicle preparing to absorb merging Islamic lenders Amlak and Tamweel. And in what marks the end of an era for Dubai, Mohamed Alabbar, a member of the emirate's ruling council, said the emirate would now pare its construction ambitions back in anticipation of waning demand after spending the past five years building as much property as fast as possible. He assured investors the Gulf's regional financial hub of Dubai was able to meet its sovereign obligations. - Reuters
Wednesday, November 19, 2008
Changi wins 6-year Saudi contract
Changi wins 6-year Saudi contract
Published: 2008/11/19
Changi Airports International Pte, a unit of the owner of Singapore’s main airfield, said it won a S$65 million (US$43 million) contract to operate and manage an airport in Saudi Arabia, its second success in the Middle East.The agreement to run the King Fahd International Airport for six years is the largest it has won in terms of value, the Singapore-based company said in a statement yesterday. Changi Airports beat nine competitors in a bidding process that started in June, it said. - Bloomberg
Blogger's note : That's USD7 million a year to run an airport.
Published: 2008/11/19
Changi Airports International Pte, a unit of the owner of Singapore’s main airfield, said it won a S$65 million (US$43 million) contract to operate and manage an airport in Saudi Arabia, its second success in the Middle East.The agreement to run the King Fahd International Airport for six years is the largest it has won in terms of value, the Singapore-based company said in a statement yesterday. Changi Airports beat nine competitors in a bidding process that started in June, it said. - Bloomberg
Blogger's note : That's USD7 million a year to run an airport.
Tuesday, November 18, 2008
Malaysian builders plan RM11b China development
Malaysian builders plan RM11b China development
By Hamisah Hamid
Published: 2008/11/18
BTimes
A GROUP of Malaysian builders plans to build commercial and residential properties with development value of up to RM11 billion in Shenyang, China.The consortium signed a memorandum of understanding with the Shenyang Province authorities in Kuala Lumpur yesterday.A special purpose vehicle, known as Shenyang-Malaysia Development Sdn Bhd (ShenMas), has been formed to undertake the conceptual planning, land acquisition, funding issues and feasibility studies.The project will take place in the Shenyang Finance and Trade Development Zone (SYFTD).
The proposed development, themed "Modern Islamic Lifestyle", is expected to be completed within five years.ShenMas executive director Datuk Lim Kim Wah said a definitive agreement was expected to be signed in June next year."The project is expected to start by the end of next year. We will form a consortium and Bina Puri will be one of the companies," he told a news conference after the signing between ShenMas and the Administrative Committee of Shenyang Province.At the signing, ShenMas was represented by its chairman, Senator Tan Sri Tee Hock Seng, and the Shenyang authority, by vice-director of SYFTD administrative committee, Sui Zhong Qing. The signing was witnessed by the Economic Planning Unit's head of special unit for overseas project, Tan Sri Zaini Omar, and the Chinese embassy's head of mission, Gu Jing Qi.
The project will be developed on a 17.96ha site in one of the most centralised Muslim community living areas in China.Shenyang is the capital city of Liaoning Province. The province is located south of northeast China, which has about 100,000 Muslims.Lim, who is the former group chief executive officer (CEO) of Bandar Raya Development Bhd and Magnum Corp Bhd, said that about 30 per cent of the commercial properties will be sold to foreigners and the rest to locals when the development is completed.
Meanwhile, Islamic Banking and Finance Institute Malaysia (IBFIM) managing director and CEO Datuk Dr Adnan Alias said he did not expect any problems in financing the project.He said the project will use syariah-compliant financing. To date, AmInvestment Bank Group and CIMB Islamic Bank Bhd have issued letters of support for the project.IBFIM is the syariah adviser to the proposed development.The project was made possible because of the close rapport between the Kuala Lumpur Chinese Assembly Hall (KLCAH) and the Shenhe district authority in Shenyang.In August this year, the KLCAH organised a trip to Shenyang, which was led by Adnan.The Shenhe authority said it chose the Malaysian group instead of groups from Singapore and Hong Kong which had approached the authority to develop the land because of Malaysia's leadership in the international Islamic finance sector.
By Hamisah Hamid
Published: 2008/11/18
BTimes
A GROUP of Malaysian builders plans to build commercial and residential properties with development value of up to RM11 billion in Shenyang, China.The consortium signed a memorandum of understanding with the Shenyang Province authorities in Kuala Lumpur yesterday.A special purpose vehicle, known as Shenyang-Malaysia Development Sdn Bhd (ShenMas), has been formed to undertake the conceptual planning, land acquisition, funding issues and feasibility studies.The project will take place in the Shenyang Finance and Trade Development Zone (SYFTD).
The proposed development, themed "Modern Islamic Lifestyle", is expected to be completed within five years.ShenMas executive director Datuk Lim Kim Wah said a definitive agreement was expected to be signed in June next year."The project is expected to start by the end of next year. We will form a consortium and Bina Puri will be one of the companies," he told a news conference after the signing between ShenMas and the Administrative Committee of Shenyang Province.At the signing, ShenMas was represented by its chairman, Senator Tan Sri Tee Hock Seng, and the Shenyang authority, by vice-director of SYFTD administrative committee, Sui Zhong Qing. The signing was witnessed by the Economic Planning Unit's head of special unit for overseas project, Tan Sri Zaini Omar, and the Chinese embassy's head of mission, Gu Jing Qi.
The project will be developed on a 17.96ha site in one of the most centralised Muslim community living areas in China.Shenyang is the capital city of Liaoning Province. The province is located south of northeast China, which has about 100,000 Muslims.Lim, who is the former group chief executive officer (CEO) of Bandar Raya Development Bhd and Magnum Corp Bhd, said that about 30 per cent of the commercial properties will be sold to foreigners and the rest to locals when the development is completed.
Meanwhile, Islamic Banking and Finance Institute Malaysia (IBFIM) managing director and CEO Datuk Dr Adnan Alias said he did not expect any problems in financing the project.He said the project will use syariah-compliant financing. To date, AmInvestment Bank Group and CIMB Islamic Bank Bhd have issued letters of support for the project.IBFIM is the syariah adviser to the proposed development.The project was made possible because of the close rapport between the Kuala Lumpur Chinese Assembly Hall (KLCAH) and the Shenhe district authority in Shenyang.In August this year, the KLCAH organised a trip to Shenyang, which was led by Adnan.The Shenhe authority said it chose the Malaysian group instead of groups from Singapore and Hong Kong which had approached the authority to develop the land because of Malaysia's leadership in the international Islamic finance sector.
Monday, November 17, 2008
GOVT looking at assets to raise revenue
Malaysian Insider
Government looking at assets to raise extra revenue
KUALA LUMPUR, Nov 11 - Desperate times call for unusual measures of raising revenue and drumming up investment. This appears to be the mantra of the Economic Council as it readies the country for slower growth and tougher times, and revisits areas and policies long considered sacred.
For a start, the government is:
# Surveying all the assets it owns – lands, shares in government-linked companies, infrastructure – and assessing which can be monetised.
# Planning to overhaul the Malaysia My Second Home programme to make it easier for foreigners to buy property here. It is also considering allowing those with professional qualifications and above 50 years old to work on a part-time basis. In this way, Malaysian industry can benefit from the skills and knowledge of some of these foreigners who have settled here under the programme.
# Going to make it easier for knowledge workers and their spouses to obtain permits to work in Malaysia. This move will address the lack of talent in several fields including biotechnology which has held back the inflow of investments from abroad.
The Economic Council, which consists representatives from the Cabinet, public sector and corporate captains, was set up a few months ago to come up with strategies to cushion the impact of the global economic turmoil on Malaysia. The 40-member council met yesterday to discuss the state of the economy and structural changes that the country needs to make.
The Malaysian Insider has learnt that the Finance Ministry is conducting an audit of assets that it owns or has a stake in. This will not be the first time that the government is mulling the possibility of raising cash by disposing of its assets. In the past, senior government officials also raised this possibility but it was shot down by more conservative elements who argued that there was little need for such a drastic approach given the steady flow of revenue from Petronas and other sources of growth.
But with crude oil prices slumping, revenue from palm oil likely to be flat and the budget deficit slated to become the highest the in the region at 4.8 per cent of the Gross Domestic Product (GDP), the administration has little choice but to generate revenue from idle assets.
In the stimulus package unveiled by Finance Minister Datuk Seri Najib Razak last week, the government said that it would develop several tracts of land in Sungai Buloh, Jalan Cochrane and Jalan Ampang Hilir. Under this plan, private developers or government-linked companies can bid for parcels of land and then develop it according to a masterplan for the whole area.
Only after the first parcel has been developed, will the government consider selling or leasing the second parcel, presumably at a much higher price than the first parcel. At a roundtable discussion organised by The Edge last week, Datuk Azman Yahya, a member of the Economic Council, said that the government should have a listing of the assets it owns.
“Monetising these assets means many things… it could include selling and leasing back of buildings, sale of property or through leases, you know…It also can be done in a way that the government does not lose ownership in the long run,’’ he said.
Apart from land, the Finance Ministry, Khazanah Nasional and Perbadanan Nasional Berhad also own stakes in companies and government-linked companies including Sime Darby, Tenaga Nasional Berhad and Maybank.
Government looking at assets to raise extra revenue
KUALA LUMPUR, Nov 11 - Desperate times call for unusual measures of raising revenue and drumming up investment. This appears to be the mantra of the Economic Council as it readies the country for slower growth and tougher times, and revisits areas and policies long considered sacred.
For a start, the government is:
# Surveying all the assets it owns – lands, shares in government-linked companies, infrastructure – and assessing which can be monetised.
# Planning to overhaul the Malaysia My Second Home programme to make it easier for foreigners to buy property here. It is also considering allowing those with professional qualifications and above 50 years old to work on a part-time basis. In this way, Malaysian industry can benefit from the skills and knowledge of some of these foreigners who have settled here under the programme.
# Going to make it easier for knowledge workers and their spouses to obtain permits to work in Malaysia. This move will address the lack of talent in several fields including biotechnology which has held back the inflow of investments from abroad.
The Economic Council, which consists representatives from the Cabinet, public sector and corporate captains, was set up a few months ago to come up with strategies to cushion the impact of the global economic turmoil on Malaysia. The 40-member council met yesterday to discuss the state of the economy and structural changes that the country needs to make.
The Malaysian Insider has learnt that the Finance Ministry is conducting an audit of assets that it owns or has a stake in. This will not be the first time that the government is mulling the possibility of raising cash by disposing of its assets. In the past, senior government officials also raised this possibility but it was shot down by more conservative elements who argued that there was little need for such a drastic approach given the steady flow of revenue from Petronas and other sources of growth.
But with crude oil prices slumping, revenue from palm oil likely to be flat and the budget deficit slated to become the highest the in the region at 4.8 per cent of the Gross Domestic Product (GDP), the administration has little choice but to generate revenue from idle assets.
In the stimulus package unveiled by Finance Minister Datuk Seri Najib Razak last week, the government said that it would develop several tracts of land in Sungai Buloh, Jalan Cochrane and Jalan Ampang Hilir. Under this plan, private developers or government-linked companies can bid for parcels of land and then develop it according to a masterplan for the whole area.
Only after the first parcel has been developed, will the government consider selling or leasing the second parcel, presumably at a much higher price than the first parcel. At a roundtable discussion organised by The Edge last week, Datuk Azman Yahya, a member of the Economic Council, said that the government should have a listing of the assets it owns.
“Monetising these assets means many things… it could include selling and leasing back of buildings, sale of property or through leases, you know…It also can be done in a way that the government does not lose ownership in the long run,’’ he said.
Apart from land, the Finance Ministry, Khazanah Nasional and Perbadanan Nasional Berhad also own stakes in companies and government-linked companies including Sime Darby, Tenaga Nasional Berhad and Maybank.
RM350m boost for Danga Bay
RM350m boost for Danga Bay
By Sim Bak Heng
Published: 2008/11/17
BTimes
Johor Baru's iconic development at the Danga Bay will be given another boost with a marina, an international convention centre, a boutique hotel, a budget hotel and an office block scheduled to be completed by 2011.
Announcing this yesterday, Datuk Lim Kang Hoo of Limbongan-Ekovest Management Sdn Bhd, the project manager of Danga Bay, said the company has pumped in RM350 million for this latest development which will take place mainly at the existing sites of the International Restaurants and the Bay Leaf Restaurant.The project, once completed, is set to transform the waterfront into both a business and recreational hub.He said the marina development could provide berthing facility for about 250 yachts, making it the largest marina in Johor and the nearest to the Johor Baru city centre.Boasting strategic location and competitive pricing, this development, scheduled for completion by middle of next year, is set to become a new spot for international sailing boats.
It will stretch for 500 metres along the seafront."Level One of the existing double-storey International Restaurants will be transformed into a Marina Club with a bistro. Level Two and a piece of land just beside the building will be the site of a 60-room boutique hotel offering lifestyle accommodation for tourists with a taste for class."This seafront boutique hotel is the first of its kind in the south. It will be ready in two years."To make Johor Baru a convention hub in the south, we are transforming the existing Bay Leaf Restaurant into a three-hall Bay Leaf International Convention and Exhibition Centre with a capacity for 3,600 people."Also to be featured at the convention centre are meeting rooms, seminar rooms, VIP rooms and a mini-theatre. It is expected to be ready by next January," he said.
Another project coming up at Danga Bay is a 120-room Tune Hotel, a budget hotel, which will be built next to the existing Danga Bay sales office.Following land acquisition as a result of coastal road construction, a multi-storey car park with a capacity for 1,000 vehicles will be built at the existing Celebration Square. An office block to house Danga Bay Sdn Bhd's corporate office will also be built in the vicinity.Danga Bay is a Johor privatisation project involving the state government's development arm Kumpulan Prasarana Rakyat Johor which is the landowner, and the developer Danga Bay Sdn Bhd.It is jointly managed by Ekovest and Pembinaan Limbongan Setia Bhd.To be developed in phases over 15 years, the massive project covers over 562ha of waterfront land at the estuary of three rivers - Sungai Danga, Sungai Skudai and Sungai Melayu.
By Sim Bak Heng
Published: 2008/11/17
BTimes
Johor Baru's iconic development at the Danga Bay will be given another boost with a marina, an international convention centre, a boutique hotel, a budget hotel and an office block scheduled to be completed by 2011.
Announcing this yesterday, Datuk Lim Kang Hoo of Limbongan-Ekovest Management Sdn Bhd, the project manager of Danga Bay, said the company has pumped in RM350 million for this latest development which will take place mainly at the existing sites of the International Restaurants and the Bay Leaf Restaurant.The project, once completed, is set to transform the waterfront into both a business and recreational hub.He said the marina development could provide berthing facility for about 250 yachts, making it the largest marina in Johor and the nearest to the Johor Baru city centre.Boasting strategic location and competitive pricing, this development, scheduled for completion by middle of next year, is set to become a new spot for international sailing boats.
It will stretch for 500 metres along the seafront."Level One of the existing double-storey International Restaurants will be transformed into a Marina Club with a bistro. Level Two and a piece of land just beside the building will be the site of a 60-room boutique hotel offering lifestyle accommodation for tourists with a taste for class."This seafront boutique hotel is the first of its kind in the south. It will be ready in two years."To make Johor Baru a convention hub in the south, we are transforming the existing Bay Leaf Restaurant into a three-hall Bay Leaf International Convention and Exhibition Centre with a capacity for 3,600 people."Also to be featured at the convention centre are meeting rooms, seminar rooms, VIP rooms and a mini-theatre. It is expected to be ready by next January," he said.
Another project coming up at Danga Bay is a 120-room Tune Hotel, a budget hotel, which will be built next to the existing Danga Bay sales office.Following land acquisition as a result of coastal road construction, a multi-storey car park with a capacity for 1,000 vehicles will be built at the existing Celebration Square. An office block to house Danga Bay Sdn Bhd's corporate office will also be built in the vicinity.Danga Bay is a Johor privatisation project involving the state government's development arm Kumpulan Prasarana Rakyat Johor which is the landowner, and the developer Danga Bay Sdn Bhd.It is jointly managed by Ekovest and Pembinaan Limbongan Setia Bhd.To be developed in phases over 15 years, the massive project covers over 562ha of waterfront land at the estuary of three rivers - Sungai Danga, Sungai Skudai and Sungai Melayu.
Builders: Don’t make us wait
Builders: Don’t make us wait
By Ooi Tee Ching
Published: 2008/11/17
Late payments in construction jobs may be a thing of the past as contractors are pushing for Parliament to pass a law to ensure faster payments and quick resolution of disputes.
Currently, although payments should be made within 30 to 60 days, which is the industry practice, it is often not the case.Contractors are now worried that as the economy is expected to slow further, they may have to wait longer for their money.They are now banking on the Construction Industry Payment and Adjudication (CIPA) Bill. Unfortunately, the draft, which was given to the Attorney General's Chambers in early 2007, has not made its way to Parliament.
Clients like government agencies and property developers, architects, engineers, and surveyors have all given their backing.However, the Bar Council, which is not a direct stakeholder in the construction industry, has yet to give its consensus.
"We've initiated this in June 2003 but until now the Bill has yet to be presented to lawmakers in Parliament," said Master Builders Association of Malaysia president Ng Kee Leen.Payment default is still a major problem because payment terms are usually on credit rather than on delivery. This means payment will be made after a certain period, after work is done.Ng said it is ironic that Malaysia has world-class construction standards and yet "mundane" things like timely payments are still not being practised.
"When there is late payment, projects are delayed, squeezing profits along the way. In the case of financially weak contractors, they may face bankruptcy," he told Business Times in an interview."Chronic problems of late and non-payments affect the entire delivery chain of consultants, contractors, building material suppliers, transporters and financiers. A rough calculation will show claims running up to billions of ringgit," he said.On average, construction jobs run into the millions and span over three years. With each progress payment involving big sums, Ng said the enactment of the CIPA Bill is vital to protect contractors' interests."This law will help to minimise payment defaults via timely and cost-efficient recourse to adjudication," he said.
Similar laws are already in practice in the region. Among them are Australia's Building and Construction Industry Security of Payment Act 2002, New Zealand's Construction Contracts Act 2002 and and Singapore's Building and Construction Industry Security of Payment Act 2004.In a separate interview, Malay Contractors Association, representing some 7,000 Bumiputera contractors, strongly support the CIPA Bill to be enacted as soon as possible.The association secretary general Datuk Osman Abu Bakar said traditionally payment disputes have been resolved via arbitration.Although the intent of arbitration was for a fast, cheap and binding resolution, the reality is different."A typical arbitration on construction dispute could take from a year to five. Payment disputes are rarely solved in less than a year," he said.
The CIPA Bill provides for contemporaneous resolution via adjudication within 14 to 42 days.Pending enactment of the CIPA Bill, the association appeals to banks and financial institutions not to take drastic action against Bumiputera contractors."Credit lines are vital to facilitate completion of construction projects. We appeal to the banks to be more understanding," he said.
By Ooi Tee Ching
Published: 2008/11/17
Late payments in construction jobs may be a thing of the past as contractors are pushing for Parliament to pass a law to ensure faster payments and quick resolution of disputes.
Currently, although payments should be made within 30 to 60 days, which is the industry practice, it is often not the case.Contractors are now worried that as the economy is expected to slow further, they may have to wait longer for their money.They are now banking on the Construction Industry Payment and Adjudication (CIPA) Bill. Unfortunately, the draft, which was given to the Attorney General's Chambers in early 2007, has not made its way to Parliament.
Clients like government agencies and property developers, architects, engineers, and surveyors have all given their backing.However, the Bar Council, which is not a direct stakeholder in the construction industry, has yet to give its consensus.
"We've initiated this in June 2003 but until now the Bill has yet to be presented to lawmakers in Parliament," said Master Builders Association of Malaysia president Ng Kee Leen.Payment default is still a major problem because payment terms are usually on credit rather than on delivery. This means payment will be made after a certain period, after work is done.Ng said it is ironic that Malaysia has world-class construction standards and yet "mundane" things like timely payments are still not being practised.
"When there is late payment, projects are delayed, squeezing profits along the way. In the case of financially weak contractors, they may face bankruptcy," he told Business Times in an interview."Chronic problems of late and non-payments affect the entire delivery chain of consultants, contractors, building material suppliers, transporters and financiers. A rough calculation will show claims running up to billions of ringgit," he said.On average, construction jobs run into the millions and span over three years. With each progress payment involving big sums, Ng said the enactment of the CIPA Bill is vital to protect contractors' interests."This law will help to minimise payment defaults via timely and cost-efficient recourse to adjudication," he said.
Similar laws are already in practice in the region. Among them are Australia's Building and Construction Industry Security of Payment Act 2002, New Zealand's Construction Contracts Act 2002 and and Singapore's Building and Construction Industry Security of Payment Act 2004.In a separate interview, Malay Contractors Association, representing some 7,000 Bumiputera contractors, strongly support the CIPA Bill to be enacted as soon as possible.The association secretary general Datuk Osman Abu Bakar said traditionally payment disputes have been resolved via arbitration.Although the intent of arbitration was for a fast, cheap and binding resolution, the reality is different."A typical arbitration on construction dispute could take from a year to five. Payment disputes are rarely solved in less than a year," he said.
The CIPA Bill provides for contemporaneous resolution via adjudication within 14 to 42 days.Pending enactment of the CIPA Bill, the association appeals to banks and financial institutions not to take drastic action against Bumiputera contractors."Credit lines are vital to facilitate completion of construction projects. We appeal to the banks to be more understanding," he said.
Saturday, November 15, 2008
Why China's Stimulus Plan Will Change the World
Why China's Stimulus Plan Will Change the World
By Bill Mann and Tim Hanson
November 12, 2008
Brazil's President Lula told his country in September, "People ask me about the [financial] crisis, and I answer, go ask Bush. It is his crisis, not mine."
Fifty days later, British Treasury Secretary Stephen Timms told a conference of G-20 nations gathered in Sao Paulo, Brazil: "We are in extraordinary times, the global economy is facing shocks which are wholly without precedent and we need a new approach. … It is a global crisis. It therefore requires an international response."
In other words, what goes around, comes around. Global schadenfreude toward a stupid and greedy United States and its subprime mortgage meltdown has rapidly become global concern about how to rescue the world from an all-encompassing financial disaster. Here's just a smattering of companies large and small that recently announced lowered outlooks for the year: Under Armour (NYSE: UA), News Corp. (NYSE: NWS), Starbucks (Nasdaq: SBUX), Vodafone (NYSE: VOD), Electronic Arts (Nasdaq: ERTS), ADP (NYSE: ADP), and Hormel (NYSE: HRL). (Yes, in these tough times, even the outlook for Spam is grim.)
And if that were not enough, the International Monetary Fund (IMF) recently lowered its outlook for the entire global economy.
One country's plan to step up
Against that backdrop, China announced a 4-trillion-yuan ($586 billion) stimulus package for its domestic economy this past Sunday. It plans to fund extensive infrastructure construction, aid poor farmers, and cut export taxes.
While China's plan has clear beneficiaries, and should help keep more laborers in their jobs and prop up domestic consumer spending, the most important (and underreported) aspect of the plan is how it will fundamentally change the economic relationship between the U.S. and China.
Here's how it was
One of the big debates over the past half-decade was whether China had reached a point in its economic development at which its internal economic gravity would allow it to "decouple" from the global economy. If so, it could continue along its fantastic growth trajectory, even as growth in the U.S. or Europe ceased or reversed.
That may sound like gobbledygook, but it's important. The U.S. has a $20 billion monthly trade deficit with China. It's funded by China's willingness to hold U.S. treasuries in its Central Bank (essentially, we're borrowing the money). China manages the arrangement by pegging its currency (the yuan) to the dollar at an artificially low rate, and by not worrying so much about certain niceties like environmental regulation and labor protection.
It's a mutually beneficial arrangement -- a weak yuan supports Chinese exporters, helping the country industrialize and quickly integrate rural migrants into its urban workforce, with the salutary effect of keeping inflation and potential political unrest low. For its part, the U.S. has gotten dirt cheap financing, by virtue of China parking more than a trillion dollars in U.S. government securities. That has supported the dollar and allowed the Federal Reserve to fuel consumer spending by keeping interest rates low.
China's stimulus package heralds the unwinding of this relationship.
Here's how it will be
This is why the decoupling argument matters. Many analysts have pointed to the thousands of factories that have shut down in China in these past few months as evidence that a slowdown in American spending will cause a depression in China -- potentially even leading to regime change. But in fact, our trade imbalance with China is artificially preserved by the aforementioned currency peg, and by the decision of China's state-run banks to make uneconomic loans to businesses it deemed worth propping up.
China has paid heavily for this relationship. Rather than invest its surplus cash in its own country, the Chinese poured money back into the U.S. to further spur our debt-fueled consumption. (Put less artfully, some poor Chinese guy in Shaanxi province was essentially helping you pay your mortgage.)
The announced stimulus package reverses that. Hundreds of billions of dollars that would have gone to propping up the greenback are now being reinvested in China, helping it to transition from its reliance on exports to a self-sustaining economy. So while China isn't yet decoupled from its export markets, this new spending plan will help it along that path.
What you need to do to survive China's huge currency reserves are about to be put to use, and while there will be some real and perhaps severe bumps along the way, the China that comes out on the other side will be a heck of a lot stronger, more independent, and more decoupled than the one we've seen up to now.
Chinese premier Wen Jiabao called his country's stimulus the "biggest contribution to the world." We don't know whether that's true, but we do know that China's ability to reach deep into its huge coffers to finance further growth gives it a significant advantage over the rest of the world's struggling economies. This is why we continue to believe in the Chinese miracle, and why we think more American investors should be taking advantage of this current temporary downturn to diversify their portfolios into previously expensive Chinese stocks.
We've recommended some Chinese companies at our Motley Fool Global Gains service that can help you do just that. A few of them are now poised to profit mightily from China's domestic bailout plan. You can read all about them by clicking here to join Global Gains free for 30 days.
Starbucks is a Motley Fool Inside Value recommendation. Vodafone is a former Inside Value selection. Starbucks and Electronic Arts are Stock Advisor picks. Under Armour is both a Rule Breakers and a Motley Fool Hidden Gems selection.
Bill is the advisor of Motley Fool Global Gains. Tim is a Global Gains senior analyst. Bill does not
own shares of any company mentioned. Tim own shares of Starbucks. The Fool owns shares of Starbucks and Under Armour. Since the fantasy football playoffs are approaching, the Fool's disclosure policy not-so-humbly requests that Braylon Edwards stop dropping the dang ball. Seriously, a fourth-grader could have caught some of those passes, dude.
By Bill Mann and Tim Hanson
November 12, 2008
Brazil's President Lula told his country in September, "People ask me about the [financial] crisis, and I answer, go ask Bush. It is his crisis, not mine."
Fifty days later, British Treasury Secretary Stephen Timms told a conference of G-20 nations gathered in Sao Paulo, Brazil: "We are in extraordinary times, the global economy is facing shocks which are wholly without precedent and we need a new approach. … It is a global crisis. It therefore requires an international response."
In other words, what goes around, comes around. Global schadenfreude toward a stupid and greedy United States and its subprime mortgage meltdown has rapidly become global concern about how to rescue the world from an all-encompassing financial disaster. Here's just a smattering of companies large and small that recently announced lowered outlooks for the year: Under Armour (NYSE: UA), News Corp. (NYSE: NWS), Starbucks (Nasdaq: SBUX), Vodafone (NYSE: VOD), Electronic Arts (Nasdaq: ERTS), ADP (NYSE: ADP), and Hormel (NYSE: HRL). (Yes, in these tough times, even the outlook for Spam is grim.)
And if that were not enough, the International Monetary Fund (IMF) recently lowered its outlook for the entire global economy.
One country's plan to step up
Against that backdrop, China announced a 4-trillion-yuan ($586 billion) stimulus package for its domestic economy this past Sunday. It plans to fund extensive infrastructure construction, aid poor farmers, and cut export taxes.
While China's plan has clear beneficiaries, and should help keep more laborers in their jobs and prop up domestic consumer spending, the most important (and underreported) aspect of the plan is how it will fundamentally change the economic relationship between the U.S. and China.
Here's how it was
One of the big debates over the past half-decade was whether China had reached a point in its economic development at which its internal economic gravity would allow it to "decouple" from the global economy. If so, it could continue along its fantastic growth trajectory, even as growth in the U.S. or Europe ceased or reversed.
That may sound like gobbledygook, but it's important. The U.S. has a $20 billion monthly trade deficit with China. It's funded by China's willingness to hold U.S. treasuries in its Central Bank (essentially, we're borrowing the money). China manages the arrangement by pegging its currency (the yuan) to the dollar at an artificially low rate, and by not worrying so much about certain niceties like environmental regulation and labor protection.
It's a mutually beneficial arrangement -- a weak yuan supports Chinese exporters, helping the country industrialize and quickly integrate rural migrants into its urban workforce, with the salutary effect of keeping inflation and potential political unrest low. For its part, the U.S. has gotten dirt cheap financing, by virtue of China parking more than a trillion dollars in U.S. government securities. That has supported the dollar and allowed the Federal Reserve to fuel consumer spending by keeping interest rates low.
China's stimulus package heralds the unwinding of this relationship.
Here's how it will be
This is why the decoupling argument matters. Many analysts have pointed to the thousands of factories that have shut down in China in these past few months as evidence that a slowdown in American spending will cause a depression in China -- potentially even leading to regime change. But in fact, our trade imbalance with China is artificially preserved by the aforementioned currency peg, and by the decision of China's state-run banks to make uneconomic loans to businesses it deemed worth propping up.
China has paid heavily for this relationship. Rather than invest its surplus cash in its own country, the Chinese poured money back into the U.S. to further spur our debt-fueled consumption. (Put less artfully, some poor Chinese guy in Shaanxi province was essentially helping you pay your mortgage.)
The announced stimulus package reverses that. Hundreds of billions of dollars that would have gone to propping up the greenback are now being reinvested in China, helping it to transition from its reliance on exports to a self-sustaining economy. So while China isn't yet decoupled from its export markets, this new spending plan will help it along that path.
What you need to do to survive China's huge currency reserves are about to be put to use, and while there will be some real and perhaps severe bumps along the way, the China that comes out on the other side will be a heck of a lot stronger, more independent, and more decoupled than the one we've seen up to now.
Chinese premier Wen Jiabao called his country's stimulus the "biggest contribution to the world." We don't know whether that's true, but we do know that China's ability to reach deep into its huge coffers to finance further growth gives it a significant advantage over the rest of the world's struggling economies. This is why we continue to believe in the Chinese miracle, and why we think more American investors should be taking advantage of this current temporary downturn to diversify their portfolios into previously expensive Chinese stocks.
We've recommended some Chinese companies at our Motley Fool Global Gains service that can help you do just that. A few of them are now poised to profit mightily from China's domestic bailout plan. You can read all about them by clicking here to join Global Gains free for 30 days.
Starbucks is a Motley Fool Inside Value recommendation. Vodafone is a former Inside Value selection. Starbucks and Electronic Arts are Stock Advisor picks. Under Armour is both a Rule Breakers and a Motley Fool Hidden Gems selection.
Bill is the advisor of Motley Fool Global Gains. Tim is a Global Gains senior analyst. Bill does not
own shares of any company mentioned. Tim own shares of Starbucks. The Fool owns shares of Starbucks and Under Armour. Since the fantasy football playoffs are approaching, the Fool's disclosure policy not-so-humbly requests that Braylon Edwards stop dropping the dang ball. Seriously, a fourth-grader could have caught some of those passes, dude.
Thursday, November 13, 2008
West Coast Highway shelved
The RM3.12 billion West Coast Highway project has been shelved as the consortium involved failed to secure financing in the stipulated time.
The Talam/Europlus Bhd consortium had been awarded the project to build a 250km road linking Taiping in Perak to Banting in Selangor."We will probably need to re-tender because the company offered the job could not finalise the deal as the financial (part was not done) in time, which is after almost 15 months," Economic Planning Unit (EPU) director Tan Sri Dr Sulaiman Mahbob said yesterday.He was speaking at a question-and-answer session at the briefing and panel discussion, "Towards Sustained Economic Growth to Counter the Global Economic Slowdown", in Kuala Lumpur.On the Selangor-Pahang water transfer project, Sulaiman said that tenders were being called. - Bernama
The Talam/Europlus Bhd consortium had been awarded the project to build a 250km road linking Taiping in Perak to Banting in Selangor."We will probably need to re-tender because the company offered the job could not finalise the deal as the financial (part was not done) in time, which is after almost 15 months," Economic Planning Unit (EPU) director Tan Sri Dr Sulaiman Mahbob said yesterday.He was speaking at a question-and-answer session at the briefing and panel discussion, "Towards Sustained Economic Growth to Counter the Global Economic Slowdown", in Kuala Lumpur.On the Selangor-Pahang water transfer project, Sulaiman said that tenders were being called. - Bernama
Wednesday, November 5, 2008
IJM set to ride on pump-priming measures
Wednesday November 5, 2008
IJM set to ride on pump-priming measures
SUBANG: IJM Corp Bhd sees potential of replenishing its present order book of RM4.6bil as governments around the world pump prime their economies.
“Apart from putting money directly into the people’s pockets via tax reduction and rebates, governments will stimulate construction activities. If that happens, there will be more construction projects,” managing director Datuk Krishnan Tan said after the company EGM yesterday.
IJM will continue to scout for opportunities in its existing markets including India, Malaysia, United Arab Emirates and Bahrain. “We’re talking about 66,000km of roads to be created in India and only 13,000km of that had been completed. The key is the availability of funding.
Private participation will be difficult because of scarcity of cash, so it must be via government spending,” Tan said.
The Middle Eastern countries were likely to maintain their level of investments as “they’re still making a lot of money with oil price at US$70 per barrel,” he added.
“We have a fairly sizeable order book of about RM4.6bil and a chewing rate of RM200mil per month. Our businesses are still very strong even if there is margin comprehension issue relating to construction.”
While domestic fuel prices have been re-adjusted and steel prices come off from almost RM4,000 per tonne to RM2,850, prices of other materials like cement have seen little change.
Prices of oil, bitumen and cement in India were unchanged, hence keeping pressure on margins, he said.
Meanwhile, Industrial Concrete Products Bhd (ICP), a subsidiary of IJM which provides pretensioned-spun concrete piles and ready-mixed concrete for Malaysia, India and China, is enjoying relatively strong pricing. Tan said demand for concrete piles and ready-mixed concrete was still positive, driven by regional port expansions and major infrastructure works. However, if material prices were to dip, ICP’s pricing would have to decline too. “We don’t think there will be major impact in margins as it’ll be driven by reduction in input cost,” he added.
Given the credit tightening in various markets that the group operates in, IJM may see a delay in payments for its construction jobs. “So far, we have not seen the situation (of delayed payments) but, considering that liquidity may be an issue in some of our markets going forward, I won’t be surprised if we see a level of difficulty in some of our clients,” Tan said.
Contractors were usually the first to be hit by credit tightening, he said, given that the construction sector tended to be a high risk one.
“We are very careful with whom we deal and, therefore, we do not see defaults as far as payments are concerned but we can expect some delays,” he said, adding that progress of existing construction projects, however, would be on schedule. Building material transactions in India, meanwhile, were mostly in cash, hence limiting payment risks, Tan said. Meanwhile, the group’s property segment may delay launches for medium-cost housing in the cities due to pressure on disposable income.
Yesterday, IJM secured shareholders’ approval to proceed with the privatisation of ICP. It is offering to buy the remaining ICP shares it does not own via a combination of cash and issuance of new IJM shares. As at Monday, it had already increased its ICP stake to 83.9%. Today is the deadline for ICP shareholders to accept IJM’s offer.
IJM set to ride on pump-priming measures
SUBANG: IJM Corp Bhd sees potential of replenishing its present order book of RM4.6bil as governments around the world pump prime their economies.
“Apart from putting money directly into the people’s pockets via tax reduction and rebates, governments will stimulate construction activities. If that happens, there will be more construction projects,” managing director Datuk Krishnan Tan said after the company EGM yesterday.
IJM will continue to scout for opportunities in its existing markets including India, Malaysia, United Arab Emirates and Bahrain. “We’re talking about 66,000km of roads to be created in India and only 13,000km of that had been completed. The key is the availability of funding.
Private participation will be difficult because of scarcity of cash, so it must be via government spending,” Tan said.
The Middle Eastern countries were likely to maintain their level of investments as “they’re still making a lot of money with oil price at US$70 per barrel,” he added.
“We have a fairly sizeable order book of about RM4.6bil and a chewing rate of RM200mil per month. Our businesses are still very strong even if there is margin comprehension issue relating to construction.”
While domestic fuel prices have been re-adjusted and steel prices come off from almost RM4,000 per tonne to RM2,850, prices of other materials like cement have seen little change.
Prices of oil, bitumen and cement in India were unchanged, hence keeping pressure on margins, he said.
Meanwhile, Industrial Concrete Products Bhd (ICP), a subsidiary of IJM which provides pretensioned-spun concrete piles and ready-mixed concrete for Malaysia, India and China, is enjoying relatively strong pricing. Tan said demand for concrete piles and ready-mixed concrete was still positive, driven by regional port expansions and major infrastructure works. However, if material prices were to dip, ICP’s pricing would have to decline too. “We don’t think there will be major impact in margins as it’ll be driven by reduction in input cost,” he added.
Given the credit tightening in various markets that the group operates in, IJM may see a delay in payments for its construction jobs. “So far, we have not seen the situation (of delayed payments) but, considering that liquidity may be an issue in some of our markets going forward, I won’t be surprised if we see a level of difficulty in some of our clients,” Tan said.
Contractors were usually the first to be hit by credit tightening, he said, given that the construction sector tended to be a high risk one.
“We are very careful with whom we deal and, therefore, we do not see defaults as far as payments are concerned but we can expect some delays,” he said, adding that progress of existing construction projects, however, would be on schedule. Building material transactions in India, meanwhile, were mostly in cash, hence limiting payment risks, Tan said. Meanwhile, the group’s property segment may delay launches for medium-cost housing in the cities due to pressure on disposable income.
Yesterday, IJM secured shareholders’ approval to proceed with the privatisation of ICP. It is offering to buy the remaining ICP shares it does not own via a combination of cash and issuance of new IJM shares. As at Monday, it had already increased its ICP stake to 83.9%. Today is the deadline for ICP shareholders to accept IJM’s offer.
Wednesday, October 29, 2008
IJM remains a sell: Research
IJM remains a sell: AmResearch
Published: 2008/10/29
The research firm also revises the construction group's target price to RM2.60
IJM Corp could be hurt by an accident at its building site in India last week, raising uncertainty on the project, AmResearch says. The stock remains a "sell" at AmResearch, which revised the target price to RM2.60.IJM Corp fell five per cent to close at RM3.04 yesterday, after losing 64.7 per cent this year. This compares with a 42.4 per cent fall in the benchmark Kuala Lumpur Composite Index this year.IJM, which has substantial projects in India, last Friday said an accident occurred at one of its building projects in Bangalore. IJM was awarded the civil work contracts worth an equivalent of RM99 million in March 2006.
"Management revealed that the project is insured under the comprehensive 'Constractors All Risks Insurance Policy and Third Party Liability Policy'," AmResearch wrote in a note to client yesterday. "Nevertheless, we believe sentiment on the stock could be further weighed down by lingering uncertainties surrounding the project's status and any subsequent delay in work flows," AmResearch said. It maintained the construction firm's profit assumptions pending further updates from IJM.
An unexciting earnings outlook, weakening order flows and rising concerns over the tight balance sheet are likely to keep IJM's shares valuation compressed at fiscal 2010 and 2011 forward price-earnings ratio of between eight and nine times, AmResearch said.Its earnings forecast for IJM in the next two years are 18 to 29 per cent lower than consensus estimates.IJM's foreign shareholding level also remains relatively high at more than 20 per cent, the research said.Malaysian shares with high foreign shareholding are more vulnerable in the current bearish market as overseas investors tend to sell emerging market assets to bring money home or switch to safer investments.
Published: 2008/10/29
The research firm also revises the construction group's target price to RM2.60
IJM Corp could be hurt by an accident at its building site in India last week, raising uncertainty on the project, AmResearch says. The stock remains a "sell" at AmResearch, which revised the target price to RM2.60.IJM Corp fell five per cent to close at RM3.04 yesterday, after losing 64.7 per cent this year. This compares with a 42.4 per cent fall in the benchmark Kuala Lumpur Composite Index this year.IJM, which has substantial projects in India, last Friday said an accident occurred at one of its building projects in Bangalore. IJM was awarded the civil work contracts worth an equivalent of RM99 million in March 2006.
"Management revealed that the project is insured under the comprehensive 'Constractors All Risks Insurance Policy and Third Party Liability Policy'," AmResearch wrote in a note to client yesterday. "Nevertheless, we believe sentiment on the stock could be further weighed down by lingering uncertainties surrounding the project's status and any subsequent delay in work flows," AmResearch said. It maintained the construction firm's profit assumptions pending further updates from IJM.
An unexciting earnings outlook, weakening order flows and rising concerns over the tight balance sheet are likely to keep IJM's shares valuation compressed at fiscal 2010 and 2011 forward price-earnings ratio of between eight and nine times, AmResearch said.Its earnings forecast for IJM in the next two years are 18 to 29 per cent lower than consensus estimates.IJM's foreign shareholding level also remains relatively high at more than 20 per cent, the research said.Malaysian shares with high foreign shareholding are more vulnerable in the current bearish market as overseas investors tend to sell emerging market assets to bring money home or switch to safer investments.
Tuesday, October 28, 2008
Marubeni gets Malaysian order for 30 train cars
Marubeni gets Malaysian order for 30 train cars
Published: 2008/10/28
TOKYO: Marubeni Corp, the Japanese trading house that is helping build a rail tunnel under the Bosporus strait, has won a RM240 million order for 30 train cars from Malaysia, the Nikkei newspaper said here.
The cars will be used on a new 180km rail link between Kuala Lumpur and Ipoh, Nikkei reported without saying where it got the information.
Japan's Mitsubishi Electric Corp and South Korea's Hyundai Rotem Co will manufacture the cars for delivery by 2010, the newspaper said.
None of the companies were available for comment. - Bloomberg
Blogger's Note: RM240/30=RM8mil per car
Published: 2008/10/28
TOKYO: Marubeni Corp, the Japanese trading house that is helping build a rail tunnel under the Bosporus strait, has won a RM240 million order for 30 train cars from Malaysia, the Nikkei newspaper said here.
The cars will be used on a new 180km rail link between Kuala Lumpur and Ipoh, Nikkei reported without saying where it got the information.
Japan's Mitsubishi Electric Corp and South Korea's Hyundai Rotem Co will manufacture the cars for delivery by 2010, the newspaper said.
None of the companies were available for comment. - Bloomberg
Blogger's Note: RM240/30=RM8mil per car
Thursday, October 23, 2008
Global crisis will slow UEM's growth
UEM: Global crisis will slow growth
By Zaidi Isham Ismail
Published: 2008/10/23
BT
INFRASTRUCTURE and property group UEM Group Bhd expects slower growth in the months ahead because of the global economic slowdown.Managing director and chief executive officer Datuk Ahmad Pardas Senin said, however, that UEM Group, which has up to RM5 billion worth of projects in the country and overseas, will not be severely affected by the crisis although slower growth is expected."We don't feel the impact just yet, but there will definitely be slower growth."But our projects in Iskandar Malaysia and India are proceeding as planned," Ahmad Pardas told Business Times at the group's Hari Raya gathering in Kuala Lumpur yesterday.
The diverse group, which has interests in construction, property and highways, among other sectors, controls UEM Builders Bhd, Pharmaniaga Bhd and UEM Land Bhd, which is expected to be listed by month-end.UEM Group in turn is wholly owned by government investment arm Khazanah Nasional Bhd.
On the second Penang bridge, Ahmad Pardas said the group was still awaiting word from the government on any new development.The government last month withdrew the second bridge concession awarded to the group.
By Zaidi Isham Ismail
Published: 2008/10/23
BT
INFRASTRUCTURE and property group UEM Group Bhd expects slower growth in the months ahead because of the global economic slowdown.Managing director and chief executive officer Datuk Ahmad Pardas Senin said, however, that UEM Group, which has up to RM5 billion worth of projects in the country and overseas, will not be severely affected by the crisis although slower growth is expected."We don't feel the impact just yet, but there will definitely be slower growth."But our projects in Iskandar Malaysia and India are proceeding as planned," Ahmad Pardas told Business Times at the group's Hari Raya gathering in Kuala Lumpur yesterday.
The diverse group, which has interests in construction, property and highways, among other sectors, controls UEM Builders Bhd, Pharmaniaga Bhd and UEM Land Bhd, which is expected to be listed by month-end.UEM Group in turn is wholly owned by government investment arm Khazanah Nasional Bhd.
On the second Penang bridge, Ahmad Pardas said the group was still awaiting word from the government on any new development.The government last month withdrew the second bridge concession awarded to the group.
Wednesday, October 22, 2008
Scomi aims for more monorail jobs
Scomi aims for more monorail jobs
By Marina Emmanuel
Published: 2008/10/22
BTimes
The company is preparing technical and financial proposals for Bangalore as well as looking at monorail systems for Patna and New Delhi
SCOMI Engineering Bhd, which won its first overseas job for a monorail system in Mumbai last week, is eyeing two more Indian cities for monorail projects worth RM4 billion over the next two years.Scomi Group Bhd's senior vice-president of group marketing, Kanesan Velupillai, said the company is looking at Bangalore in the state of Karnataka and Patna in Bihar.It is also believed to be looking at a monorail system for New Delhi."We are working concurrently in preparing technical and financial proposals for Bangalore.
"The technical proposal is expected to be submitted to the Bangalore Metro Rail Corp (which oversees the implementation of metros and monorails in Karnataka) by next week, while the financial proposal should be sent by the end of November," Kanesan told Business
Times.
According to Kanesan, Scomi was invited to work with Indian Railway Construction Co (Ircon) on a feasibility study for the implementation of a monorail system in Patna following the working visit of India's Railways Minister Lalu Prasad Yadav to Kuala Lumpur in May this year."The feasibility report should be ready by the middle of next year," Kanesan said.
Apart from the Indian subcontinent, Scomi has also set its sights on Nigeria.Kanesan said the company has sent an advance team to Nigeria to work on an accelerated implementation and execution plan for a monorail system in Lagos."The plan is to be completed and submitted by the end of November," he said.
Scomi's new-generation monorail, employing the Scomi Urban Transit Rail Applications technology, will be featured in all the overseas monorail projects.Each car can carry 142 passengers, and each train will have four to six cars.On the feasibility study Scomi is undertaking for a monorail system in Hanoi, Vietnam, Kanesan expects it to be completed by the end of next month. "The next phase for Vietnam will be to carry out a detailed project report for implementation," he said.
By Marina Emmanuel
Published: 2008/10/22
BTimes
The company is preparing technical and financial proposals for Bangalore as well as looking at monorail systems for Patna and New Delhi
SCOMI Engineering Bhd, which won its first overseas job for a monorail system in Mumbai last week, is eyeing two more Indian cities for monorail projects worth RM4 billion over the next two years.Scomi Group Bhd's senior vice-president of group marketing, Kanesan Velupillai, said the company is looking at Bangalore in the state of Karnataka and Patna in Bihar.It is also believed to be looking at a monorail system for New Delhi."We are working concurrently in preparing technical and financial proposals for Bangalore.
"The technical proposal is expected to be submitted to the Bangalore Metro Rail Corp (which oversees the implementation of metros and monorails in Karnataka) by next week, while the financial proposal should be sent by the end of November," Kanesan told Business
Times.
According to Kanesan, Scomi was invited to work with Indian Railway Construction Co (Ircon) on a feasibility study for the implementation of a monorail system in Patna following the working visit of India's Railways Minister Lalu Prasad Yadav to Kuala Lumpur in May this year."The feasibility report should be ready by the middle of next year," Kanesan said.
Apart from the Indian subcontinent, Scomi has also set its sights on Nigeria.Kanesan said the company has sent an advance team to Nigeria to work on an accelerated implementation and execution plan for a monorail system in Lagos."The plan is to be completed and submitted by the end of November," he said.
Scomi's new-generation monorail, employing the Scomi Urban Transit Rail Applications technology, will be featured in all the overseas monorail projects.Each car can carry 142 passengers, and each train will have four to six cars.On the feasibility study Scomi is undertaking for a monorail system in Hanoi, Vietnam, Kanesan expects it to be completed by the end of next month. "The next phase for Vietnam will be to carry out a detailed project report for implementation," he said.
Tuesday, October 21, 2008
Funds to buy undervalued stocks raised to RM10bil
Tuesday October 21, 2008
Funds to buy undervalued stocks raised to RM10bil
By FLORENCE A. SAMY
Malaysia ideal as hub for international dispute resolutions
KUALA LUMPUR: The Government has doubled the amount of money available to buy undervalued stocks to RM10bil and will also continue with its spending to boost the country’s economy. Finance Minister Datuk Seri Najib Tun Razak announced that these two moves were part of the Government’s plan to ensure that the economy would not be affected by the global financial crisis caused by the meltdown of banks in the United States. “The country is not in a financial crisis and we certainly should not talk ourselves into one,” said Najib during his keynote address at the Khazanah Megatrends Forum yesterday.
However, he warned that the country should brace for a lower economic growth next year in view of the global slowdown.
Among the measures Najib touched on were:
> INJECTION of RM5bil to double the size of Valuecap Sdn Bhd that was set up by the Government in 2003 to invest in undervalued companies;
> REVIEW of some foreign investment committee guidelines to make it more attractive for foreign investors, especially in the property and commercial sectors;
> LIBERALISATION of the service sector to attract more investment and generate more local employment;
> RE-PRIORITISING projects with focus on those that can be implemented expeditiously and with high economic multiplier effects; and
> STRENGTHENING of small and medium-scale enterprises through new initiatives by financial institutions and access to special Bank Negara funds.
Najib, who is also Deputy Prime Minister, said he would give more details in Parliament on Nov 4 during his Budget winding-up speech. On Valuecap, Najib said the funds were being pumped in given the current opportunities for value investing. “The stock market has many fundamentally strong companies. Many companies are presently trading at attractive valuations, creating opportunities for value investing.”
On re-prioritising projects, Najib said some “lumpy projects” with little economic multiplier effects could be postponed but promised that the Government would continue with its spending.
“The planned expenditure for 2009 will continue and there will be no financial cutbacks. This position was agreed upon by the National Economic Council executive council under the chairmanship of the Prime Minister.”
He said short-term measures to tackle external financial turmoil should not come at the expense of the country’s long-term development and global competitiveness. Najib also slammed the West who “incessantly lectured and hectored us to adhere to their advice (10 years ago during the Asian financial crisis).” “Ironically, they have now unfortunately failed to live up to their own high standards of lending and regulatory functions they had expected of us,” said Najib.
Funds to buy undervalued stocks raised to RM10bil
By FLORENCE A. SAMY
Malaysia ideal as hub for international dispute resolutions
KUALA LUMPUR: The Government has doubled the amount of money available to buy undervalued stocks to RM10bil and will also continue with its spending to boost the country’s economy. Finance Minister Datuk Seri Najib Tun Razak announced that these two moves were part of the Government’s plan to ensure that the economy would not be affected by the global financial crisis caused by the meltdown of banks in the United States. “The country is not in a financial crisis and we certainly should not talk ourselves into one,” said Najib during his keynote address at the Khazanah Megatrends Forum yesterday.
However, he warned that the country should brace for a lower economic growth next year in view of the global slowdown.
Among the measures Najib touched on were:
> INJECTION of RM5bil to double the size of Valuecap Sdn Bhd that was set up by the Government in 2003 to invest in undervalued companies;
> REVIEW of some foreign investment committee guidelines to make it more attractive for foreign investors, especially in the property and commercial sectors;
> LIBERALISATION of the service sector to attract more investment and generate more local employment;
> RE-PRIORITISING projects with focus on those that can be implemented expeditiously and with high economic multiplier effects; and
> STRENGTHENING of small and medium-scale enterprises through new initiatives by financial institutions and access to special Bank Negara funds.
Najib, who is also Deputy Prime Minister, said he would give more details in Parliament on Nov 4 during his Budget winding-up speech. On Valuecap, Najib said the funds were being pumped in given the current opportunities for value investing. “The stock market has many fundamentally strong companies. Many companies are presently trading at attractive valuations, creating opportunities for value investing.”
On re-prioritising projects, Najib said some “lumpy projects” with little economic multiplier effects could be postponed but promised that the Government would continue with its spending.
“The planned expenditure for 2009 will continue and there will be no financial cutbacks. This position was agreed upon by the National Economic Council executive council under the chairmanship of the Prime Minister.”
He said short-term measures to tackle external financial turmoil should not come at the expense of the country’s long-term development and global competitiveness. Najib also slammed the West who “incessantly lectured and hectored us to adhere to their advice (10 years ago during the Asian financial crisis).” “Ironically, they have now unfortunately failed to live up to their own high standards of lending and regulatory functions they had expected of us,” said Najib.
Monday, October 20, 2008
Transhipment cargo rise drives Malaysia port development
12 May 2008
Transhipment cargo rise drives Malaysia port development
By Huang Seeda
Kuala Lumpur
www.cargonewsasia.com
Despite strong competition, Malaysian ports, driven by strong growth in container transhipment traffic, are continuing to expand. Transhipment accounts for about 50 per- cent of Malaysian ports' total container trade.
At the southern tip of Peninsular Malaysia, the Port of Tanjung Pelepas (PTP) in Johor - the country's largest container port with a throughput of 5.4 million TEUs last year, up 14.5 percent over 2006 - is adding four berths to the existing 10, which will enable it to handle 12 million TEUs by 2011. Construction works for berth 11 and 12 will begin soon and are expected to be completed by the second quarter of next year while building of berths 13 and 14 will begin next year and be completed by the first quarter of 2010.PTP chairman Mohd Shaik Osman said: "The total cost of the expansion plan, which will also involve the construction of container yards and installation of equipment, will be about US$126.9 million."
PTP expects to see a surge of throughput this year with the port's recent signing of an agreement with Malaysia's top shipping company, MISC, for the setting up of a joint venture company so MISC vessels can use the port. PTP will hold a 70 percent stake in the venture and MISC the balance. MISC will become the third major shipping line to use PTP as their hub in the region following Maersk and Evergreen's move to PTP in 2000 and 2002 respectively. MISC said that the agreement would benefit the shipping company greatly.
"Besides being within Iskandar Malaysia, which promises a growing hinterland cargo, PTP is also strategically located at the confluence of the world's shipping lanes; and this is a crucial factor for our transhipment operations.''PTP chief executive officer, Harun Johari, said that the deal would contribute towards PTP's rapid growth and enhance the port's connectivity by at least 20 percent.
In central Malaysia, Port Klang, in the state of Selangor, comprises Westports and Northport. The two ports together handled a combined container throughput of 7.2 million TEUs in 2007, compared with 6.3 million TEUs a year earlier. But taken individually, PTP remains the top port, with Westports handling 4.34 milllion TEUs in 2007, a growth of 18 percent, and Northport 2.86 million TEUs, up 7.5 percent on 2006. The two Klang Valley ports were planning to merge but so far no decision has been reached. Westports executive director Ruben Emir Gnanalingam said: "Westports continues to show strong growth in throughput and we expect to become a five-million TEU port by year-end." Westports handled a record 1.16 million TEUs in the first quarter of this year, up 19 percent year-on-year. Transhipment business reached 730,101 TEUs, a 13.6 percent year-on-year growth. Westports has embarked on a $253.86 million three-year expansion plan which includes construction of two additional berths to beef up annual capacity by 30 percent from the existing six million TEUs to eight million TEUs. The new berths will be able to accommodate 13,400 TEU vessels.Northport posted a strong 17 percent growth in the first quarter of this year to 730,452 TEUs compared with a year ago.Northport managing director and chief executive officer Basheer Hassan Abdul Kader said: "We are confident the growth will be sustained since we are also witnessing a surge in regional transhipment. New feeder networks are also contributing towards more transhipment." Northport has allocated $185.64 million for a three-year expansion, which includes the re-development of a multi-purpose berth into a dedicated container terminal.
On the eastern seaboard of Peninsular Malaysia, Kuantan Port handled 127,600 TEUs in 2007, up two percent over 2006. In January and February, the port recorded a throughput of 22,009 TEUs, up 13.49 percent over the same period last year.Kuantan's goal is to transform itself into a megaport with the building of container berths with a 14 km quayline and draught of 18m as well as constructing a 120 hectares container yard, said managing director Wong Soon Fah of port operator Kuantan Port Consortium.
Penang Port, which operates a 900m container terminal handled 926,000 TEUs last year, up nine percent over 2006. The port aims to handle over one million TEUs this year.
In East Malaysia, Sabah container ports, comprising facilities at Tawau, Kota Kinabalu and Sandakan, handled a total 268,000 TEUs in 2007.
Transhipment cargo rise drives Malaysia port development
By Huang Seeda
Kuala Lumpur
www.cargonewsasia.com
Despite strong competition, Malaysian ports, driven by strong growth in container transhipment traffic, are continuing to expand. Transhipment accounts for about 50 per- cent of Malaysian ports' total container trade.
At the southern tip of Peninsular Malaysia, the Port of Tanjung Pelepas (PTP) in Johor - the country's largest container port with a throughput of 5.4 million TEUs last year, up 14.5 percent over 2006 - is adding four berths to the existing 10, which will enable it to handle 12 million TEUs by 2011. Construction works for berth 11 and 12 will begin soon and are expected to be completed by the second quarter of next year while building of berths 13 and 14 will begin next year and be completed by the first quarter of 2010.PTP chairman Mohd Shaik Osman said: "The total cost of the expansion plan, which will also involve the construction of container yards and installation of equipment, will be about US$126.9 million."
PTP expects to see a surge of throughput this year with the port's recent signing of an agreement with Malaysia's top shipping company, MISC, for the setting up of a joint venture company so MISC vessels can use the port. PTP will hold a 70 percent stake in the venture and MISC the balance. MISC will become the third major shipping line to use PTP as their hub in the region following Maersk and Evergreen's move to PTP in 2000 and 2002 respectively. MISC said that the agreement would benefit the shipping company greatly.
"Besides being within Iskandar Malaysia, which promises a growing hinterland cargo, PTP is also strategically located at the confluence of the world's shipping lanes; and this is a crucial factor for our transhipment operations.''PTP chief executive officer, Harun Johari, said that the deal would contribute towards PTP's rapid growth and enhance the port's connectivity by at least 20 percent.
In central Malaysia, Port Klang, in the state of Selangor, comprises Westports and Northport. The two ports together handled a combined container throughput of 7.2 million TEUs in 2007, compared with 6.3 million TEUs a year earlier. But taken individually, PTP remains the top port, with Westports handling 4.34 milllion TEUs in 2007, a growth of 18 percent, and Northport 2.86 million TEUs, up 7.5 percent on 2006. The two Klang Valley ports were planning to merge but so far no decision has been reached. Westports executive director Ruben Emir Gnanalingam said: "Westports continues to show strong growth in throughput and we expect to become a five-million TEU port by year-end." Westports handled a record 1.16 million TEUs in the first quarter of this year, up 19 percent year-on-year. Transhipment business reached 730,101 TEUs, a 13.6 percent year-on-year growth. Westports has embarked on a $253.86 million three-year expansion plan which includes construction of two additional berths to beef up annual capacity by 30 percent from the existing six million TEUs to eight million TEUs. The new berths will be able to accommodate 13,400 TEU vessels.Northport posted a strong 17 percent growth in the first quarter of this year to 730,452 TEUs compared with a year ago.Northport managing director and chief executive officer Basheer Hassan Abdul Kader said: "We are confident the growth will be sustained since we are also witnessing a surge in regional transhipment. New feeder networks are also contributing towards more transhipment." Northport has allocated $185.64 million for a three-year expansion, which includes the re-development of a multi-purpose berth into a dedicated container terminal.
On the eastern seaboard of Peninsular Malaysia, Kuantan Port handled 127,600 TEUs in 2007, up two percent over 2006. In January and February, the port recorded a throughput of 22,009 TEUs, up 13.49 percent over the same period last year.Kuantan's goal is to transform itself into a megaport with the building of container berths with a 14 km quayline and draught of 18m as well as constructing a 120 hectares container yard, said managing director Wong Soon Fah of port operator Kuantan Port Consortium.
Penang Port, which operates a 900m container terminal handled 926,000 TEUs last year, up nine percent over 2006. The port aims to handle over one million TEUs this year.
In East Malaysia, Sabah container ports, comprising facilities at Tawau, Kota Kinabalu and Sandakan, handled a total 268,000 TEUs in 2007.
Malaysian firm in US$2b Kerala port project
Malaysian firm in US$2b Kerala port project
By Kamarul Yunus
Published: 2008/10/20
BTimes
Pembinaan Redzai, which has some 40 per cent stake in Westports Holdings, will develop an international container transshipment hub with India's Lanco group
A CONSORTIUM comprising India's Lanco Group of Companies and Malaysia's Pembinaan Redzai Sdn Bhd has secured a US$2 billion (RM7 billion) deal to develop the Vizhinjam International Transshipment Terminal Port in India.Last month, the Kerala state government issued a Letter of Intent to Lanco, and the licence agreement for the project is expected to be signed next month.In a statement, Lanco said the licence agreement will be signed between the Kerala state government and the Special Purpose Company (SPC) to be incorporated by the Lanco-Pembinaan Redzai consortium members.The Kerala state government will hold a 24 per cent equity stake in the SPC, while the balance equity will be held by the consortium.
Lanco said the port project was awarded to the consortium of Lanco and Pembinaan Redzai after the Indian government formally granted the security clearance to the consortium earlier last month.Pembinaan Redzai owns some 40 per cent stake in Westports Holdings Sdn Bhd, the holding company for Westports Malaysia Sdn Bhd that runs Westports at Port Klang.
The Vizhinjam port project involves the development of an international container transshipment port. The port was put on tender by the Kerala state government in August last year. In February this year, Pembinaan Redzai teamed up with Lanco to submit a bid for the port project, along with four other consortium bidders.The project is envisaged to be developed in four phases, with an ultimate capacity of 6.5 million TEUs (20-foot equivalent units). The port will be equipped with state-of-the-art technology, equipment and highest industry service standards.Lanco said the project has distinct advantages of being a transshipment hub, given its 15-18 metre natural draft and proximity to international sea routes.Lanco will commence preparation of a detailed project report and start the process of obtaining clearances for the project and financial closure, which is expected to take about 12 to 18 months.The construction activities will start thereafter in order to commence commercial operations of Phase 1 by end of 2012.The port, when developed, will attract a major share of the container transshipment traffic of India from the ports of neighbouring countries like Sri Lanka, Malaysia, Saudi Arabia and Singapore."Indian companies engaged in exports and imports will save substantial foreign exchange outflow, time, risks and transshipment costs at foreign ports," Lanco said.
By Kamarul Yunus
Published: 2008/10/20
BTimes
Pembinaan Redzai, which has some 40 per cent stake in Westports Holdings, will develop an international container transshipment hub with India's Lanco group
A CONSORTIUM comprising India's Lanco Group of Companies and Malaysia's Pembinaan Redzai Sdn Bhd has secured a US$2 billion (RM7 billion) deal to develop the Vizhinjam International Transshipment Terminal Port in India.Last month, the Kerala state government issued a Letter of Intent to Lanco, and the licence agreement for the project is expected to be signed next month.In a statement, Lanco said the licence agreement will be signed between the Kerala state government and the Special Purpose Company (SPC) to be incorporated by the Lanco-Pembinaan Redzai consortium members.The Kerala state government will hold a 24 per cent equity stake in the SPC, while the balance equity will be held by the consortium.
Lanco said the port project was awarded to the consortium of Lanco and Pembinaan Redzai after the Indian government formally granted the security clearance to the consortium earlier last month.Pembinaan Redzai owns some 40 per cent stake in Westports Holdings Sdn Bhd, the holding company for Westports Malaysia Sdn Bhd that runs Westports at Port Klang.
The Vizhinjam port project involves the development of an international container transshipment port. The port was put on tender by the Kerala state government in August last year. In February this year, Pembinaan Redzai teamed up with Lanco to submit a bid for the port project, along with four other consortium bidders.The project is envisaged to be developed in four phases, with an ultimate capacity of 6.5 million TEUs (20-foot equivalent units). The port will be equipped with state-of-the-art technology, equipment and highest industry service standards.Lanco said the project has distinct advantages of being a transshipment hub, given its 15-18 metre natural draft and proximity to international sea routes.Lanco will commence preparation of a detailed project report and start the process of obtaining clearances for the project and financial closure, which is expected to take about 12 to 18 months.The construction activities will start thereafter in order to commence commercial operations of Phase 1 by end of 2012.The port, when developed, will attract a major share of the container transshipment traffic of India from the ports of neighbouring countries like Sri Lanka, Malaysia, Saudi Arabia and Singapore."Indian companies engaged in exports and imports will save substantial foreign exchange outflow, time, risks and transshipment costs at foreign ports," Lanco said.
Thursday, October 16, 2008
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.
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.
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