JCorp mulls hotel sales

By Sharen Kaur

sharen@nstp.com.my

JOHOR Corp (JCorp) is considering selling some of its hotel assets and reinvesting the money to drive earnings from its hospitality business.

JCorp Hotels & Resorts Sdn Bhd,the hospitality arm of the Johor state’s investmentcompany, had received several offers and is eyeing properties in Kuala Lumpur, a senior executive said.

JCorp Hotels owns and manages five properties in Johor namely The Puteri Pacific Johor Bahru, Persada Johor International Convention Centre, Sibu Island Resort, Selesa Johor Bahru and Selesa Pasir Gudang, and one in Negri Sembilan, which is Selesa Port Dickson.

JCorp Hotels deputy chief executive officer Muhamad Mazlan Ali said the six properties are now worth between RM550 million and RM600 million.

“We are harvesting our investments to selfsustain in our business and not burden our parent.

If there are opportunities to sell one property and buy another, we will do it,” he said in an interview with Business Times.
Muhamad Mazlan said JCorp Hotels had received a private investor’s offer who wants to buy Selesa Port Dickson for about RM50 million.

It expects to sign a firm deal by early nextyear, he added.
“As for some of our other properties, we are still evaluating all the offers. They are all profitable businesses. It is just a matter of which asset we want to sell.

“Our ultimate aim for the expansion of our brand is to own hotels in Kuala Lumpur. We are currently eyeing a few properties in Kuala Lumpur.

“Kuala Lumpur is a good market where the hotel occupancy and average room rate currently exceeds 60 per cent and RM250, respectively,” he said.

On its expansion into other states, Muhamad Mazlan said the deciding factor will be market demand and tourists arrival.
Meanwhile, Muhamad Mazlan said the company has no plans for now to go overseas.

“After the financial crisis in 1997, we decided to consolidate our operation and focus only on Malaysia,” he said.

JCorp Hotels, formerly knownas Kumpulan Penambang (Johor) Sdn Bhd, had co-owned several hotels in Australia and Switzerland in the 1990s, through its 50:50 joint venture with Hotel Grand Central Group.

It exited the markets in early 2000, selling its stake to Grand Central to fund local expansion.

JCorp also owned a boutique hotel in London but decided to harvest its investment in the property after receiving a favourable offer from an investor.

RM950m for new trains

By Sharen Kaur
sharen@nstp.com.my
Published in NST on December 27 2011


The government has budgeted nearly RM1 billion on new trains for the Ampang light rail transit (LRT) line extension project and KTM Bhd, sources said.

The government, through Syarikat Prasarana Negara Bhd, is setting aside RM600 million for the supply of trains for the Ampang LRT project.

It has also allocated another RM350 million to upgrade KTMB’s existing fleet, the sources added. It is learnt that tenders for the supply of 20 sets of six-car electric commuter trains for the LRT project closed on December 12, attracting six bidders.

They are Bombardier Transportation/Scomi Rail Bhd, Caf Spain/Tranz-i Sdn Bhd, China North Railway/EmRail Sdn Bhd, Rotem Korea/ CMC Engineering Sdn Bhd, Romania Astra/Smh Rail Sdn Bhd and China South Railway/Zhuzhou Electric Locomotive Co Ltd (CSR ZELC).

A source told Business Times that their bids range between RM550 million and RM780 million, adding that the lowest bidder is CSR ZELC. “The trains are meant to service the existing LRT network, and the new line-up to Putra Heights.

The contract is expected to be awarded by April,” the source said. CSR ZELC is one of the major electric locomotive
manufacturers in China and a subsidiary of China South Locomotive & Rolling Stock Corp Ltd.

The company has a RM1.9 billion contract from the government to supply 38 units of sixcar electric train coaches for KTMB.
This is a government project under the National Key Results Area programme to improve public transportation in the Klang
Valley.

CSR ZELC has so far delivered six units. The trains are undergoing testing and commissioning at the KTMB Batu Gajah Depot in Ipoh, Perak and are expected to operate next month.

For the Kelana Jaya LRT line extension project, Prasarana has awarded a RM1.2 billion contract for the supply of 22 six-car train sets to Bombardier-Hartasuma Sdn Bhd.

Meanwhile, the source said the RM350 million KTMB budget is to upgrade its existing fleet in accordance with the new electric train sets. The existing trains are manually operated.

The source said Prasarana is expected to call for a tender for the refurbishment exercise in the first quarter of next year.

Posco/Daewoo tipped to win Ampang LRT project

By Sharen Kaur
sharen@nstp.com.my
Published in NST on December 22 2011
Kuala Lumpur: A consortium led by Posco/Daewoo Engineering of Korea has emerged as the odds-on favourite to win a contract worth about RM1.1 billion to help undertake system works for the Ampang light rail transit (LRT) line extension project.

Business Times understands that Syarikat Prasarana Negara Bhd favours Posco/Daewoo as it offered to use the Communication-Based Train Control (CBTC) Signalling System supplied by France-based Thales Group.

For the Kelana Jaya LRT line extension and monorail system, Prasarana had awarded the system works contract to Thales on a direct negotiated basis because of the CBTC system.

Thales’ CBTC technology has been in use since 1985 and the system has been proven on 53 projects around the world.

It is learnt that Thales was favoured again for such a job for the Ampang LRT line extension, but to demonstrate transparency, the French group decided to offer its technology to the four shortlisted groups namely Colas/CMC Engineering, George Kent/China Railway Samsung/LG and Posco/Daewoo.

Tender for the contract closed on June 16. Initially, eight companies had submitted bids, ranging between RM950 million and RM1.45 billion.

The other four contenders who did not make it to the final round were SNC Lavalin/WW Engineering,Siemens/Scomi, Ansaldo/Emrail and Invensys Rail/Ingress/Balfour Beatty.

Prasarana officials said after careful evaluation, the board recommended to the Ministry of Finance Inc (MOF) to award the contract to Posco/Daewoo.

“Posco/Daewoo was selected based on the Thales CBTC signalling system and they had offered the lowest price. The Letter of Award is expected to be issued to the consortium next month,” an official told Business Times.

The Posco/Daewoo consortium also comprises Japan’s Sojitz Group and Global Rail Sdn Bhd, a local railway engineering and construction firm.

Meanwhile, the official said that George Kent was not selected as the company lacks experience as a railway engineering and construction contractor.

Samsung had quoted a higher price than Posco/Daewoo, while Colas/CMC was already awarded a contract worth RM673.92 million for system works for the Kelana Jaya LRT extension.

MMC-KTMB - Prelude to bigger deal?

By Sharen Kaur
sharen@nstp.com.my
Published in NST on December 21 2011
MMC Corp Bhd’s plan to buy over Keretapi Tanah Melayu Bhd (KTMB) could be a prelude to a bigger job offer from the government, analysts say. Affin Securities analyst Chong Lee Len believes that MMC or its controlling stakeholder Tan Sri Syed Mokhtar Al-Bukhary may get a “sweetener” from the government for taking over KTMB.

Jupiter Securities head of research Pong Teng Siew also thinks the government may offer MMC a huge contract for helping to take over the loss-making company.

Business Times reported on Monday that MMC was undertaking a due diligence to privatise KTMB and pump in some RM1 billion to take control of its operations. MMC has confirmed the report.

KTMB, which has been a takeover target for a long time, has been bleeding red ink since its corporatisation in 1992 due to high operating costs.

The national railway company did make a net profit of RM9 million to RM15 million from 1993 to 1995, before falling into the red again in the following years.

Pong believes the RM1 billion investment by MMC may not be enough to stop it from bleeding.

“I think MMC may not be able to swallow KTMB because of its size and unprofitable business. Our railway lines are short haul railway and you won’t get the kind of economies of scale as you would with long haul railway like in the West.

“The commuter trains are also heavily subsidised for the simple reason they can’t make money. I’m not sure why MMC think they can turn around KTMB unless they are getting something out of the deal,” Pong told Business Times.

The analysts are not so worried that MMC is stretching its borrowings to acquire assets.

The company recently said it is buying Penang Port, while another Syed Mokhtar’s company, DRB-HICOM Bhd, is bidding for a stake in Proton Holdings Bhd.

MMC is currently Malaysia’s single largest borrower with net gearing level of 218 per cent. As at September 30 2011, it has debts of RM19.4 billion.

“Some RM16.2 billion of the borrowings are mainly to finance power projects, which are a cash-generating business for MMC.

“I don’t think MMC will have issues with financing all its deals as it has strong bankers’ support,” Pong said.

Chong, meanwhile, said the listing of Gas Malaysia Sdn Bhd next year and the possibility of Malakoff Bhd being floated on the stock exchange will provide cashflow for MMC to take up new acquisitions.

OSK Research believes MMC’s balance sheet may be stretched by the development unless other asset sales are in the pipeline.

The Ascott mulls grouping, floating Malaysia assets

By Sharen Kaur
sharen@nstp.com.my
Published in NST on December 21 2011

Kuala Lumpur: The Ascott Ltd, the world’s largest serviced residence owner-operator, may group its assets in Malaysia and float them on the local bourse.

It may also inject the assets into Ascott Residence Trust (ART), a real estate investment trust (REIT) listed in Singapore to expand the REIT to generate more income for shareholders, said a key official.

“We are toying with several options now. We are still looking at a REIT in Malaysia but the current market is not conducive for us to launch one now,” said Ascott regional general manager for Singapore and Malaysia, Tan Boon Khai.

Singapore-based Ascott, the hospitality arm of CapitaLand Ltd, is the largest international serviced residence operator in Malaysia.

It currently owns and manages Ascott Kuala Lumpur, Somerset Seri Bukit Ceylon and Somerset Ampang.

It also manages Marc Service Suites and Tiffani by i-Zen for their owners.

Over the next five years, Ascott will manage five more properties for third parties, which are under construction. They are Ascott Sentral Kuala Lumpur, Citadines Uplands Kuching, Citadines D’Pulze Cyberjaya, Somerset Puteri Harbour and Somerset Uptown Damansara.

“We were looking at a REIT in Malaysia a few years ago but then crisis hit in 2009. We are bullish on the market but we need to identify our assets. A REIT has to be worth over RM1 billion,” Tan told Business Times.

“Ascott is also expanding ART. If needed, we could also inject the assets in Malaysia into the REIT. There is nothing on the table yet,” he said.

ART is world’s first pan-Asian serviced residence real estate investment trust, which was listed in March 2006. The REIT has more than tripled to about S$2.7 billion (RM6.6 billion) since its listing.

It has a portfolio of more than 60 properties in Asia Pacific and Europe.

ART is managed by Ascott Residence Trust Management Ltd, a wholly-owned unit of The Ascott and an indirect wholly-owned subsidiary of CapitaLand.

Its serviced residences are operated under the Ascott, Citadines and Somerset brands and are located in key gateway cities like Beijing, Shanghai, Singapore, Tokyo, London, Paris, Ho Chi Minh City, Jakarta, Manila, Melbourne and Perth.

MMC doing due diligence on KTMB

By Sharen Kaur
sharen@nstp.com.my
Published in NST on December 19 2011

MMC Corp Bhd is undertaking a due diligence exercise to privatise Keretapi Tanah Melayu Bhd (KTMB), people familiar with the matter said.

The company, controlled by tycoon Tan Sri Syed Mokhtar Al-Bukhary, plans to pump in as much as RM1 billion to take control of KTMB’s operations.

According to the Railwaymen’s Union of Malaya (RUM), the Minister of Finance Inc (MOF) had given MMC the green light to undertake the due diligence, which will take a few months.

However, RUM is against MMC or any other party taking over KTMB.

“They must have an agenda. We think KTMB can do well on its own. All it needs is a good management team to operate the
business efficiently,” said RUM president Abdul Razak Md Hassan.

An MMC official confirmed the plan and said the company will undertake a feasibility study to ensure that the rate of return on the investment will be more than 10 per cent.

It is understood that MMC, which had submitted a proposal to the MOF on the matter, plans to take over KTMB’s freight and passenger services. The railway infrastructure, meanwhile, will remain with the government.

The infrastructure valued at over RM50 billion is held by Railway Asset Corp (RAC), which is under the custodian of the Ministry of Transport.

This is not the first attempt by MMC to take over the operations of KTMB. MMC and Gamuda Bhd were eyeing to privatise KTMB and take over its assets in 2003. The consortium had held preliminary
discussions with the government but nothing materialised then.

Meanwhile, the source said as an operator, MMC will have to invest in rolling stocks required for the operations and
manage KTMB’s current workforce of more than 5,000 employees.

However, he said MMC will not have to absorb KTMB’s debt of over RM1 billion because the fixed assets comprising 11 depots, land, building and equipment will remain with the government.

"If MMC can proof that it could improve the efficiency of KTMB in providing the services to the public without government subsidies and funds, then its proposal may be considered," he said.

The source said this is the vertical separation of KTMB, where as a railway operator, MMC must be able to demonstrate that it can be an efficient and profitable railway company in the course of taking over the railway.

KTMB recorded RM1.45 billion in accumulative net losses up until 2008 and cannot "afford" to pay back its own operational costs and loans.

The operator has been bleeding red ink since it was corporatised in 1992 due to high operating costs. It did make a net profit of RM9 million to RM15 million from 1993 to 1995, before falling into the red again in the following years.

Ascott plans to double portfolio in Malaysia

By Sharen Kaur
sharen@nstp.com.my
Published in NST on December 12 2011

KUALA LUMPUR: Singapore-based The Ascott Ltd, the world's largest international serviced residence owner-operator, plans to double its serviced apartment portfolio in Malaysia over the next five years.

Ascott regional general manager for Singapore and Malaysia, Tan Boon Khai said it aims to open one or two properties a year as it is bullish on the market.

"We see Malaysia as a very good market. Although there is economic recession in some countries, Malaysia is holding up," Tan told Business Times.

"There is a lot of foreign investments flowing into Malaysia. This alone will create demand for our properties. The more properties we have, there will be economies of scale," he said.

Ascott aims to own and manage serviced apartments in Sabah and Sarawak, Johor and Penang. It plans to build the properties from scratch, or buy over existing buildings, Tan said.

Currently, Ascott owns and manages Ascott Kuala Lumpur, Somerset Seri Bukit Ceylon and Somerset Ampang. It also manages Marc Service Suites and Tiffani by i-Zen for third parties.

The average occupancy for the five operating properties between January and October 2011 was 62 per cent.

Over the next five years, the group will manage Ascott Sentral Kuala Lumpur (owned by GSB Sentral Sdn Bhd, an associate of MRCB and Gapurna Group); Citadines Uplands Kuching; Citadines D'Pulze Cyberjaya; Somerset Puteri Harbour, (owned by Nusajaya Consolidated Sdn Bhd and a joint venture between United Malayan Land Bhd and UEM Land Bhd); and Somerset Uptown Damansara (owned by See Hoy Chan Sdn Bhd).

"If the owners are keen to sell their serviced apartments, we will consider exploring. The trend is building where people want to stay in serviced apartments during their travel. We will look at all angles to grow," Tan said. 

It operates serviced apartments under three brands - Ascott, Citadines and Somerset.

The flagship Ascott-branded properties are premier serviced residences that offer residents discreet service in an exclusive environment. 

Citadines serviced residences cater to independent travellers while Somerset serviced residences are designed for business executives who travel with their families.

The Ascott has about 22,000 operating serviced residence units in key cities of Asia Pacific, Europe and the Gulf region.

SapuraCrest Kencana eyes lucrative overseas deals

By Sharen Kaur
sharen@nstp.com.my
Published in NST on December 10 2011
The upcoming merged entity is bidding for multi-billion ringgit worth of oil and gas jobs stretching from Malaysia to Brazil.

SapuraCrest Kencana Petroleum Bhd, the upcoming merged entity
between Malaysia’s two largest oil and gas (O&G) players, is eyeing more international projects, especially in Australia and Brazil, to boost its already fat order book of RM13 billion.

SapuraCrest Petroleum Bhd executive vicechairman and president, Datuk Seri Shahril Shamsuddin, said the company and Kencana Petroleum Bhd were bidding for multi-billion ringgit worth of O&G jobs stretching from Malaysia to Brazil.

“There is a lot of work coming out of Australia and Brazil is also another country that you can’t ignore. India is also heating up with new investments in oilfields. 

“In the longer term, we will look at the Gulf of Mexico. As a merged entity, we can take on more jobs and bid for larger projects,” Shahril said in an interview with Business Times yesterday.

Also present was Kencana Petroleum Bhd’schief executive officer Datuk Mokhzani Mahathir.

SapuraCrest last month won a US$1.4 billion (RM4.4 billion) contract from Petroleo Brasileiro SA (Petrobras), Latin America’s largest company, to charter and operate three units of pipe-laying support vessels.

Kencana, on the other hand, announced yesterday that it won a RM1 billion contract to help build a liquefied natural gas processing facility in Australia, awarded by United States-based Bechtel International Inc.

Shahril said SapuraCrest Kencana, which will be the world’s fourth largest O&G service provider by market capitalisation upon merging, aimed to grow its revenue by 15 to 20 per cent per annum.

“Currently, our combined revenue is between RM5 billion and RM5.5 billion a year and we are confident to increase that year-on year,” Shahril said.

On whether the new merged entity will embark on an acquisition trail, Shahril said if there were companies that could help mitigate risk or enable SapuraCrest Kencana to do projects at low cost, it would consider the options available.

The acquisitions may include buying engineering firms or those involved in specialised areas.

SapuraCrest and Kencana are merging in a deal worth RM11.85 billion to create the largest O&G service provider by asset in the country. 

Under their cash and share swap deal, special purpose vehicle Integral Key Sdn Bhd will buy all the assets and liabilities of SapuraCrest for RM5.87 billion and Kencana for RM5.98 billion.

The companies are obtaining shareholders' approval at their respective extraordinary meetings on December 14 and December 15.

The exercise is scheduled to be completed by first quarter 2012.

Shahril and Mokhzani are confident they will get the shareholders' support.

"We believe shareholders will react positively. It is value creation and unlocking the potential of the companies. The merger allows us to leverage on the balance sheet and invest in core areas to improve the business.

"None of us are cashing out. We will have the same shares after the merger as we do now. Shahril and I will make business decisions together with the board. We are not going to sit down and have a big fight and jeopardise anything," said Mokhzani. 

Shahril and Mokhzani will take on the posts of group president/CEO and executive vice-chairman of SapuraCrest Kencana, respectively.

Datuk Hamzah Bakar, currently chairman of SapuraCrest, will be nominated as group chairman.

Towards better rail connectivity

By Sharen Kaur
sharen@nstp.com.my
Published in NST on December 5 2011

KUALA LUMPUR: RAIL services at the KL Sentral transport hub in Brickfields, Kuala Lumpur, are set to improve as connectivity widens in the Klang Valley, said Express Rail Link Sdn Bhd (ERLSB) chief.

ERLSB, controlled by YTL Corp Bhd, holds a 30-year concession to operate the KLIA Ekspres and KLIA Transit rail services from KL Sentral to the Kuala Lumpur International Airport.

Currently, both the KLIA Ekspres and KLIA Transit carry between 14,000 and 15,000 passengers a day.

ERLSB chief executive officer Normah Mohd Noor expects this to grow by 3,000 passengers a day per year as YTL extends the line from KLIA to the new low-cost carrier terminal, KLIA2.

YTL is spending some RM100 million for the extension work, which commenced in July.

The new line is expected to operate by the fourth quarter of next year.

"We currently operate 12 trains which are running at 30 per cent capacity, so we do not need more trains at the moment to accommodate the growth in passenger volume," Normah told Business Times.

ERLSB has 12 electric high-speed train sets for the KLIA Ekspres, which runs from KL Sentral to KLIA in 28 minutes, and KLIA Transit, which stops at Bandar Tasek Selatan, Putrajaya and Salak Tinggi before heading to the airport in 35 minutes.

Normah said the light rail transit (LRT) extension and mass rapid transit (MRT) projects will also boost traffic flow at KL Sentral by double digits.

She lauded the move by Subang Skypark Sdn Bhd to build a railway line from the Keretapi Tanah Melayu Bhd (KTMB) station in Subang Jaya to Skypark Terminal at the Sultan Abdul Aziz Shah Airport.

Business Times recently reported that Subang Skypark is believed to have received an offer from the government to build the railway line.

Under the second phase of development, Subang Skypark will link the line to the Sungai Buloh-Kajang MRT system, where it will integrate with the MRT and KTMB stations in Sungai Buloh.

The project has been approved under the Economic Transformation Programme to improve public transportation and the government is expecting the service from KL Sentral to Skypark Terminal to commence in two years.

"If the plan works out, it will be good for the industry," Normah said.

Subang Skypark is the developer for SkyPark Terminal, formerly known as Terminal 3 and is controlled by rail tycoon Tan Sri Ravindran Menon.

ERLSB in seamless ticketing talks

By Sharen Kaur
sharen@nstp.com.my
Published in NST on December 5 2011
KUALA LUMPUR: EXPRESS Rail Link Sdn Bhd (ERLSB) is in talks with foreign air-rail operators to develop a seamless ticketing solution and cross-promote each other's products and services, in a bid to tap the growing inbound market.

Chief executive officer Normah Mohd Noor said while there are about 25 air-rail operators worldwide, ERLSB is in talks with Heathrow Express (London), Airport Express (Hong Kong), Airport Link (Sydney), Gautrain Rapid Rail Link (Johannesburg) and Aeroexpress (Moscow).

In an interview with Business Times recently, Normah said they are looking at collaborating with ERLSB to create a seamless ticketing system across all key modes of transport, including rail and bus.

"It will allow travellers to buy airline tickets online from their point of departure. The ticket will have a barcode and they can use it upon landing at the airport to get on to their next mode of transport to their final destination," she said.

Normah said the tie-up with the operators will help improve customer experience and market share, in addition to gaining new customers.

"Because we are transporting only airport passengers and workers, we have the challenge of getting more people to use our trains.

"To add insult to injury, we have to compete with taxi firms and bus operators at the airport. With the collaboration, we can expect more travellers onboard our KLIA Ekspres," Normah said.

ERLSB, controlled by YTL Corp Bhd, holds a 30-year concession to operate the KLIA Ekspres and KLIA Transit rail services from KL Sentral in Brickfields to the Kuala Lumpur International Airport.

Normah said she expects the company's revenue and ridership, which grew between 6 per cent and 8 per cent over the last two years, to record double-digit growth from next year. She said the collaboration will also come in handy for the company in the long run as it is planning to move into mobile ticketing, a process whereby customers can order, purchase and obtain airline and train tickets from any location and at any time using a mobile device.

UEM Land sets RM3b sales target

By Sharen Kaur
sharen@nstp.com.my
Published in NST on November 29 2011
KUALA LUMPUR: UEM Land Holdings Bhd, the country's biggest property player by market capitalisation, aims to sell RM3 billion worth of properties next year, an increase of 40 per cent from this year.

Managing director and chief executive officer Datuk Wan Abdullah Wan Ibrahim said the company was optimistic on hitting the sales target.

"We are confident as we have the right products to offer in the market. We are close to achieving this year's sales target of RM2.2 billion," said Wan Abdullah.

The merger with Sunrise Bhd has also raised UEM Land's profile, given the former's expertise in high-rise integrated developments and branding.

For the year ended Dec 31, 2010, UEM Land posted a net profit of RM194.5 million on a revenue of RM469.7 million.

Maybank Investment Bank expects the company to record a strong 37 per cent growth in net profit in 2011, mainly due to the consolidation of Sunrise's earnings.

Wan Abdullah said UEM Land had launched projects worth close to RM11 billion in the past four years and RM10 billion of that would be realised over the next few years.

"We have projects worth RM34 billion to be launched over the next several years," he said after unveiling the RM1.3 billion Angkasa Raya, Sunrise's new landmark project in the Kuala Lumpur city centre, last Tuesday.

UEM Land is the property arm of UEM Group, which owns 69.1 per cent of the company. UEM Group, in turn, is wholly owned by Khazanah Nasional Bhd.

The company became the biggest property player on Bursa Malaysia after buying Sunrise earlier this year. It now has a market capitalisation of about RM11 billion.

UEM Land is currently developing Nusajaya, one of the five flagship zones of Iskandar Malaysia in Johor.

Nusajaya spans 9,662ha, with UEM Land owning 4,161ha that are under various stages of development.

UEM Land also has projects in Bangi, Cyberjaya, Kajang and Mont'Kiara.

Colas Rail tracking high-speed train project

By Sharen Kaur

sharen@nstp.com.my

Published in NST on November 28 2011

KUALA LUMPUR French group Colas Rail, the recent winner for part of a light rail extension work, plans to bid for the high-speed rail project linking Kuala Lumpur and Singapore.

"We constructed almost half of all the existing high-speed lines in France linking major cities in Europe and have the expertise and manpower.

"We believe we can do the job in Malaysia," Colas chairman and chief executive officer Patrick Guenole told Business Times in a recent interview.

The company also plans to bid for two major high-speed rail projects in Russia and Morocco with its partners. The projects in Russia and Morocco are worth US$17 billion (RM54 billion) and Euro2 billion (RM8.5 billion), respectively.

Colas and a local partner won a RM674 million contract in June this year to do the electrical and mechanical system for the Kelana Jaya LRT extension line.

YTL Corp Bhd first mooted the high-speed rail project in Malaysia in the late 1990s and again in 2006. It operates the KLIA Express rail service, which connects the KL International Airport to KL Sentral, the city's transport hub.

The project was put on hold in April 2008 due to its high cost, with a RM8 billion estimation then.

Last year, the government said it will be revived and was highlighted as a high impact project in the government's Economic Transformation Programme.

The project could take shape next year but it will depend on a feasibility study by the Land Public Transport Commission (SPAD).

SPAD will undertake the feasibility study on the project early next year, which will be completed in six to 12 months. The commission had completed a pre-feasibility study.

Last Friday, Minister of International Trade and Industry Datuk Seri Mustapa Mohamed reportedly said results of the pre-feasibility study have been positive.

" ... certainly it is a necessity (to have the train). I think it is a question of numbers, cost and benefits," he told a press conference after the Malaysia-Singapore Business Forum.

CMC in talks with Thales

By Sharen Kaur
sharen@nstp.com.my
Published in NST on November 28 2011

KUALA LUMPUR: CMC Engineering Sdn Bhd, an engineering, procurement and construction contractor, is in talks with France-based Thales Group and other foreign railway experts to jointly bid for railway jobs in Malaysia.

CMC is eyeing contracts for system works and the supply of trains for the mass rapid system (MRT) project, said its chairman and chief executive officer, Datuk Abdul Rahman Yusof.

Abdul Rahman said the company will focus on the system work packages involving power supply, communication, supervisory control and data acquisition, as well as signalling and ticketing systems.

"The prequalification process for the contracts are ongoing and we hope to qualify. We will be signing a joint venture agreement with Thales within the next two months to bid for the jobs," he told Business Times in an interview.

CMC Engineering, a low-profile company founded by Abdul Rahman, formerly general manager of Sapura's Uniphone business, is not new to the railway business in Malaysia.

In 2000, it won a RM130 million contract for the Ipoh-Padang Besar electrified double tracking project in a consortium with Japan's Tomen.

In June this year, CMC and its French partner Colas Rail won a RM674 million contract for electro-mechanical (E&M) system for the Kelana Jaya light rail transit (LRT) extension line.

The pact has also bid for E&M works for the Ampang LRT extensi-on line. The government is expected to award the contract in early 2012. There are eight bidders for the job.

Abdul Rahman said CMC is also eyeing several contracts for the Gemas-Johor Baru electrified double-tracking project and is in the midst of finding a foreign partner to bid for several packages.

On the E&M contract for the Kelana Jaya line, Abdul Rahman said CMC-Colas expects to start construction by the middle of next year and complete it in 2014.

"We will invest in fresh talent as we need some 150 professionals for the job. We are hiring from Malaysia, France, Australia and the UK," he said.

Partners eye more rail deals under ETP

By Sharen Kaur
sharen@nstp.com.my
Published in NST on November 28 2011
COLAS Rail and its local partner CMC Engineering Sdn Bhd plan to bid for new railway contracts under the Economic Transformation Programme (ETP).

They have bid for the electro-mechanical (E&M) system works of the Ampang light rail transit (LRT) extension line, said Colas chairman and chief executive officer Patrick Guenole, who expressed hope that they would win the job.

"We plan to bring London's Docklands Light Railway (DLR) to Kuala Lumpur. The DLR is similar to the LRT so there will be transfer of European technology. It will be good for Malaysia ... good for competition," he said in a recent interview with Business Times.

Colas and CMC, founded by Datuk Abdul Rahman Yusof, formerly general manager of Sapura's Uniphone business, are currently partners for the RM674 million contract for E&M system for the Kelana Jaya LRT extension line. They won the contract in June, beating rivals Hartasuma-Bombardier and Ingress-Balfour Beatty.

The government and Syarikat Prasarana Negara Bhd were in favour of Colas, a leader in the UK and French railway construction market, because of its railway expertise.

Colas, which has a yearly turnover of about ?12 billion (RM51 billion), is a major European player in design and engineering of large-scale complex railway infrastructure projects.

"We came to Malaysia by chance and see many opportunities for growth here. We have set up a company in Malaysia and will use it as a platform to build our business here, as well as in Indonesia, Singapore, Thailand and Vietnam.

"We aim to be a long-term in Malaysia. We are attracted to the positive gross domestic product projection and regulatory environment.

"This is good for foreign investors like us," he said.

For the E&M contract for the Ampang Jaya line, Business Times had reported that it attracted eight bidders.

Besides CMC-Colas, the other bidders are Scomi Engineering Bhd-Siemens AG, Hartasuma-Bombardier-SNC Lavalin, Ingress-Invensys Rail Systems-Balfour Beatty, Leighton Emrail Sdn Bhd-Ansaldo STS, George Kent (M) Bhd-Thales and two Korean consortiums, each led by Samsung Engineering and Posco.

Their bids range between RM1.3 billion and RM1.5 billion.

The government is expected to award the contract early next year.