Bidding process for RRI land to start by year-end

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 31, 2012

The prequalification process for bids for the Rubber Research Institutes of Malaysia (RRI) land in Sungai Buloh, Selangor, will start by the end of this year, says a source close to the Employees Provident Fund (EPF).

The source said EPF would call for the prequalification bids as soon as it gets the government's nod for the proposed development of the land.

Pre-qualification bids would be opened to developers who meet the requirements, he said.

"EPF will pen out the requirements and post them on its website soon. Among the criteria are strong financing, expertise, reputation and innovation," the source said.

EPF is the land owner and master developer of the project.

It is buying 890ha of the available 1,215ha RRI agricultural land from the Federal Government for over RM2 billion.

The pension fund is expected to carve out the land in parcels of 20ha to 200ha each, depending on the use of it. The idea is to build low-end to luxury housing and commercial properties.

The balance of the RRI land is to house the Malaysian Rubber Board hub (217ha) and the My Rapid Transit (MRT) Sungai Buloh depot (72ha).

The master planning for the land development is being carried out by EPF's wholly-owned unit, Kwasa Land Sdn Bhd.

An official from the EPF said Malaysian Resources Corp Bhd (MRCB) was not involved in the master planning.

"MRCB's involvement in the project is on an arm's length basis. Like other developers, they will also have to bid for the land parcels," the official told Business Times.

EPF has a controlling stake in MRCB, the master developer of the KL Sentral project in Brickfields, Kuala Lumpur.

It is understood that several property players like Glomac Bhd, Mah Sing Group Bhd and Gadang Holdings Bhd have presented their ideas to the EPF.

The redevelopment of the RRI land forms part of the greater Kuala Lumpur Strategic Development initiative, a project under the 10th Malaysia Plan.

The southern portion of the RRI land, which includes parcels bordering the Tropicana Golf & Country Resort, falls under the jurisdiction of the Petaling Jaya City Council.

The northern portion, which houses the MRT depot, comes under the purview of the Shah Alam City Council.

MRCB in line for RM1b MRT job

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 30, 2012

Malaysian Resources Corp Bhd (MRCB) is expected to win a contract worth about RM1 billion this week for the Sungai Buloh-Kajang (SBK) MY Rapid Transit (MRT) line.

If awarded, this will be the first railway-related job for MRCB this year.

MRCB, which is 42 per cent owned by the Employees Provident Fund, also won a RM1.33 billion contract for the Ampang light rail transit (LRT) extension project in August 2011.

The MRT contract is expected to boost MRCB's existing order book to more than RM2.5 billion.

Business Times learnt that the latest contract is to build viaduct guideways and other associated works between the Taman Mesra and Kajang stations.

Project owner Mass Rapid Transit Corp Sdn Bhd (MRT Corp) was not immediately available for comments.

Kenanga Investment Bank Bhd recently pegged a target price of RM2.71 per share for MRCB based on sum-of-parts valuation.

Other analysts placed a target price of as high as RM3.10 on MRCB. The stock closed at RM1.73 last Friday.

There are eight viaduct work packages available for the SBK line and seven have been awarded by MRT Corp.

The other winners are Gadang Holdings Bhd, Mudajaya Group Bhd, IJM Corp Bhd, Ahmad Zaki Resources Bhd, Sunway Construction Sdn Bhd, MTD Construction Sdn Bhd and Syarikat Muhibbah Perniagaan & Pembinaan Sdn Bhd.

Sources close to MRT Corp said it was also expected to award several contracts to build stations and a depot over the next few weeks.

This includes a contract worth RM1.6 billion to supply trains for the SBK line.

MRT Corp has received bids from Changchun Railways Vehicle Co Ltd, Siemens SMH Rail Consortium and CSR Zhuzhou Electric Locomotive Co Ltd to supply the trains.

"The awarding of contracts for the SBK line is progressing smoothly. Those interested companies will not have to wait too long to know the status of their bid. MRT Corp is evaluating all bids cautiously.The award of contracts will be transparent," the source said.

So far, MRT Corp has awarded 33 contracts valued at RM15.5 billion for the SBK line.

There are 21 contracts in the process of evaluation. The remaining 31 contracts will be awarded by the end of this year.

The final value of the SBK Line stretching 51km will be determined by the end of this year after all 85 contracts have been awarded.

KYM: Steel mill project needs US$5b funding

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 28, 2012

KYM Holdings Bhd says the proposed steel mill at its industrial park project in Perak will need a US$5 billion (RM16 billion) investment to produce five million tonnes per year.

KYM has formed a partnership with the Perak State Development Corp (PKNP) to reclaim 1,376 hectares in Bagan Datoh for the industrial park.

They have set up a special purpose vehicle (SPV) called Perak Eco Industrial Development Sdn Bhd to help reclaim the land, build infrastructure and look for investors.

KYM holds an indirect 30 per cent stake in the SPV while PKNP holds 20 per cent and the rest is held by private investors.

The project forms phase one of the multi-billion ringgit Perak eco-industrial hub by the state, centred on iron and steel industries.

KYM chief operating officer Allan Chin Kong Yaw said all preliminary works for the project like getting approvals from the relevant authorities for building construction and the environmental impact assessment are in progress. 

Chin said according to Boston Consulting Group (BCG), the site (reclaimed land) is able to accommodate a huge steel mill, a shipyard, dry bulk port, tank farms, oil and gas industries and fabricators. 

KYM, controlled by its executive director Datuk KY Lim and his family, appointed BCG to do a feasibility study on the project. 

“We are talking to several potential investors here and overseas who are keen to invest in the project. The funding will be sourced by the SPV,” Chin said. 

Speaking after a shareholders meeting yesterday, he said the iron ore supply for the steel mill and heavy industries will come from Vale International’s RM9 billion iron ore distribution centre in Teluk Rubiah, Perak. 

The distribution centre, scheduled to start operation in 2014, will have a capacity to handle 90 million tonnes of iron ore per year. 

Chin said although KYM has an indirect stake in the SPV, the project will contribute positively to its earnings growth. 

For the current financial year ending January 31 2013, KYM expects to do better than last year, led by its manufacturing division.

Firms keen on high-speed rail job must bid via tender exercise

By Sharen Kaur

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 28, 2012


KUALA LUMPUR: The Land Public Transport Commission (SPAD) will not be considering proposals submitted previously by several companies for the high-speed rail project linking Kuala Lumpur and Singapore, a key official said.

SPAD chief development officer Azmi Abdul Aziz said companies which have submitted proposals and are still interested in the high-speed rail project will have to participate in the tender exercise to be called next year.

Business Times reported previously that UEM Group-Hartasuma, China Infraglobe Consortium-Global Rail and YTL Corp Bhd have made presentations on the project to the National Key Economic Area laboratory.

Azmi said the feasibility study that is currently being carried out by SPAD does not include details pen out in their proposals.

"We are not looking at the proposals at all. We don't want to be influenced by any of the studies that they have carried out in preparing their proposals.

"We are doing the study with a clear mind. This is a government project and we will look at how it can benefit the country and the people at the end of the day," Azmi told Business Times at the commission's buka puasa event here recently.

Azmi said the study includes, among others, risk management, return on investment, and the potential economic activities that can be created from the development of the high-speed rail.

He said SPAD will kick-start the process of calling for tenders by mid-2013.

"After calling for the first round of tenders, we will go back to the government to appoint a project developer, similar to Prasarana and MRT Corp.

"If everything goes well, the project can start by the end of next year. That is the target," Azmi said.

Syarikat Prasarana Negara Bhd is leading the RM7 billion Ampang and Kelana Jaya light rail transit (LRT) line extension projects while MRT Co is heading the Klang Valley MY Rapid Transit (MRT) development, the country's largest infrastructure project.

SPAD chairman Tan Sri Syed Hamid Albar had said during the breaking of fast event that discussions between Malaysia and Singapore on the high-speed rail project is expected to commence soon.

The commission will put forward its recommendations to the government after completing the feasibility study.

The high-speed rail network has been highlighted as a high-impact project in the government's Economic Transformation Programme.

High-speed rail talks with Singapore to start soon

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 27, 2012

LINKING INTEREST: Certain parties from the island city-state have ‘informally’ approached the Land Public Transport Commission about the project, says chairman

DISCUSSIONS between Malaysia and Singapore on the high-speed rail project linking Kuala Lumpur and the island city-state is expected to commence soon, says a key official from the Land Public Transport Commission (SPAD).

According to SPAD chairman Tan Sri Syed Hamid Albar, certain parties from Singapore have “informally” approached the commission on the high-speed rail project.

“The high-speed rail is for Malaysia. It is an exciting project. If the government decides to go ahead with the project, the engagement will be at the top level. There are many parties interested in the project.

“There are certain decisions that need to be made by the government like whether the high-speed rail will link Kuala Lumpur and Johor Baru, or Singapore.
“SPAD will put forward its recommendations to the government after completing the feasibility study. The government will have 2012 to make its own decision before approaching Singapore. The study is positive so far,” Syed Hamid said at the commission’s Buka Puasa event here yesterday.

SPAD is in the second phase of a feasibility study, which looks into the corridors, alignment, terminal points and the stops in-between.

Its chief development officer Azmi Abdul Aziz said the high-speed rail is targeted to start next year with tenders to be called by end-2013.

When asked to comment on the expected cost for the project, Azmi said it was still being finalised.

“This is not a direct turnkey project. It may be carried out as a private finance initiative or public private partnership. There is excitement from the corporate, public and the government sectors, from both neighbours (Malaysia and Singapore),” Azmi said.

Azmi, however, confirmed that 95 per cent of the investments for the project would be domestic-driven.

About 60 per cent of the cost will go towards infrastructure development, including civil works and track laying, and about 30 per cent towards rolling stocks.

Sources said the final cost would depend on whether the project would involve an underground rail link between the two neighbouring countries.

“It will also depend on the alignment in Malaysia. The length of the high-speed rail link is expected to be between 300km and 400km. We have to see how many stations are needed,” the source told Business Times.

The high-speed rail network has been highlighted as a high-impact project in the government’s Economic Transformation Programme.

Sepang Goldcoast inks deal with Chinese firm

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 21, 2012

SHAH ALAM: CHINA'S Zhejiang Zhongxia Investment Co Ltd has inked a deal with Sepang Goldcoast Sdn Bhd (SGSB) to develop tourism properties worth RM1 billion at the Sepang GoldCoast develop-ment in Bagan Lalang, Sepang, Selangor.

Zhejiang executive director Xu Yong said the company will build beach residences, comprising six 18-storey towers with over 1,000 units.

Zhejiang will also develop a Fisherman Wharf commercial street, modelled after the Fisherman Wharf in San Francisco and Hong Kong.

"The Fisherman Wharf and residences will bring attention to the whole Goldcoast development.

"Already we have interest from Asian investors who want to buy the properties and invest in the development," Xu Yong told reporters after signing the cooperation agreement yesterday,

Xu Yong said the total investment in the project will be around RM700 million, with the financing coming from China.

He added that the project will be developed in four phases over five to six years, starting early next year.

"We will form a consortium to undertake the project. It will comprise Zhejiang, SGSB and several local construction firms. We will be calling for tenders to help build the properties.

"There will be a lot of local involvement in the project," he said.

Xu Yong said this will be the first of many investments that Zhejiang is considering in Malaysia.

"We hope there will be many more cooperations with SGSB, and the Selangor state government," he said.

SGSB is a 70:30 joint venture between Sepang Bay Sdn Bhd, which is majority controlled by shareholders of CNI Group, a multi-level marketing outfit in Indonesia, and Permodalan Negeri Selangor Bhd, the Selangor state investment arm.

The company owns 2,084ha of coastal land in Sepang.

Completed projects at Sepang Goldcoast include the Golden Palm Tree water villas and the Golden Palm Tree Resort & Spa.

SGSB executive vice-president Wong Mun Chong said the company is at the tail end of finalising the masterplan for the 2,084ha land.

The Goldcoast development is divided into three areas - north coast, central coast and south coast.

SGSB is currently developing the south coast where the partnership with Zhejiang comes in.

Ampang LRT job may not go to lowest bidder

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 20, 2012

KUALA LUMPUR: SYARIKAT Prasarana Negara Bhd said the government is not obliged to award the systems contract for the Ampang light rail transit (LRT) extension line project to the lowest bidder.

Prasarana media manager Azhar Ghazali said the totality of the offer will be considered, which among others, include the life cycle cost that will bring about reducing operating expenditures over equipment lifespan.

The best-fit solution will also be taken into account, the spin-off it could generate to the economy, and the knowledge gained by the local companies, Azhar said yesterday in a statement.

"As this project is not all about lowest price alone, all elements of evaluation parameters must be moderated so that the results willl reflect any qualifiers attached within.

"Leaked information found in the media recently did not give a full picture. Dated selective excerpts have been superseded by new information resulting from the clarifications.

"They did not do justice either by labelling certain activities as interference, when, what, were and are being done, are due diligence processes by the government," Azhar said.

Tenders for the systems contract for the Ampang line extension closed on June 16 2011.

Eight groups had made the bids, with prices ranging from RM950 million to RM1.45 billion.

They are George Kent-China Railway Construction-Tewet GmbH; Posco-Sojitz-Daewoo International-Thales; Invensys-Balfour Beatty Rail-Ingress; Colas-CMC Engineering-Thales; Samsung-LG-Thales; SNC Lavalin-WW Engineering-Bombardier; Siemens-Scomi Engineering and Ansaldo-Emrail-Leighton.

Azhar said because the systems work is a complex job, it involves a few rounds of deliberations to ensure all perspectives are given due recognition before the ultimate decision of awarding is reached.

In reaching for a decision, he said benefits from competitive project cost point of view, long-term operating expenditure savings solution for the operator, and the opportunity for local companies to prosper and lead the development must be articulately balanced.

As of to-date, he said there is yet a final decision on the award.

"An official announcement on the award would be made by the Ministry of Finance when all matters in regard to the contract had been considered and studied, he added.

George Kent: LRT job still under evaluation

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 19, 2012

PUCHONG: THE major shareholder of George Kent (M) Bhd is keeping mum on whether political pressures will derail its chance to win a RM960 million systems contract for the Ampang light rail transit (LRT) project.

"We are a business group ... we don't talk about politics. I am not a politician. Just wait. Once it is awarded, we will make a statement," George Kent chairman Tan Sri Tan Kay Hock said.

"The LRT contract is still under evaluation. It may come to us, it may not come to us," Tan told reporters after the company's shareholders' meeting yesterday.

Business Times reported last month that a consortium led by George Kent, a mechanical and engineering specialist, was tipped to win the systems contract for the Ampang LRT line extension.

Other members of the consortium include China Railway Construction Corp and Tewet GmbH, a project management consultant firm.

The systems contract was to be awarded by June this year.

Tenders closed on June 16 and eight groups had made the bids.

The two other frontrunners for the job were the Invensys-Balfour Beatty Rail-Ingress consortium, and Posco-Sojitz-Daewoo International-Thales.

Following a Business Times report, Parti Keadilan Rakyat's strategic director Rafizi Ramli alleged that George Kent had been awarded the systems contract by the Finance Ministry.

It was reported that George Kent was unsuitable fit for the job as it did not fulfil the project's financial and technical requirements, which involved new rail works and an upgrade of all important communications and signalling system for the entire rail network.

George Kent's cash and bank balances for the financial year ended January 31 2012 were RM59.6 million.

According to its annual report, the major shareholders of the company are Tan and his wife, with a combined direct and indirect stake of about 70 per cent.

Prasarana group managing director Datuk Shahril Mokhtar had said at the signing of a joint-venture agreement between the company and Naza TTDI Sdn Bhd that the systems contract would be awarded "real soon".

Several parties keen to take Ingress private

By Sharen Kaur

sharen@nstp.com.my

Published in NST on July 18, 2012

Speculation has been rife that major shareholders of Ingress are mulling taking the company private in a deal worth more than RM300 million.

Ingress Corp Bhd, a car parts supplier listed on Bursa Malaysia's Main Market, has received offers from several parties to take the company private, but so far nothing has been decided.

"There are several parties who have approached us, asking us to take the company private. But nothing has been decided," chairman and chief executive officer Datuk Rameli Musa told Business Times after a shareholders' meeting yesterday.

Rameli did not name the interested parties.

Speculation has been rife that major shareholders of Ingress, including Rameli, are mulling taking the company private in a deal worth more than RM300 million.

The other shareholders are Shamsudin@Samad Kassim and Datuk Vaseehar Hassan Abdul Razack.

Ingress, through its subsidiaries, manufactures roll-formed plastic moldings and weather strips, automotive door assemblies and other automotive components.

Its energy division provides engineering services to power, utility, oil and gas, and railway industries.

Rameli, who directly and indirectly owns 31.2 per cent of Ingress, said currently, there are no plans to take the company private.

Ingress, which started as an automotive components maker in 1991, was listed on Bursa Malaysia in 2001.

The price of its shares has been increasing in the last two months, from a low of RM1.00 on May 17, to as high as RM1.26.

The company, which has a market capitalisation of RM104.6 million, closed unchanged at RM1.24 yesterday.

According to Rameli, the company currently focuses on expanding its business and increasing its bottom line.

For the financial year ended January 31 2012, Ingress posted a pre-tax profit of RM27.3 million on revenue of RM658.7 million.

More than 80 per cent of the pre-tax profit and revenue was derived from its manufacturing business. The rest of the income came from its energy division, which includes power and railway.

Plan to raise non-fare revenue to 30pc

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 12, 2012

KUALA LUMPUR: Syarikat Prasarana Negara Bhd aims to increase its non-fare revenue from about seven per cent currently, to some 30 per cent, in five years.

Currently, Prasarana earns about RM30 million a year from its non-fare revenue and its venture into property development will help to increase that by more than fourfold.

Prasarana was set up by the government under the Ministry of Finance Inc, to facilitate, undertake and expedite public infrastructure projects.

Its group of companies are also asset owners and operators of several public transport projects like the Ampang and Kelana Jaya light rail transit (LRT) lines, KL Monorail, as well as bus operations in Klang Valley and Penang.

These assets, including the non-fare revenue like monorail and bus advertisements, gives Prasarana around RM400 million in revenue, a year.

"Venturing into the property development business will open new and constant non-fare revenue income for the group. The fares for public transport are highly structured, and ours have not been reviewed for the last 10 years.

"Wherever there are opportunities to capitalise on the assets that we have, we will go for it. Property development is a good sustainable business for the group," said Prasarana group managing director Datuk Shahril Mokhtar.

Prasarana has about 8.4ha of undeveloped land along its Ampang and Kelana Jaya light rail transit (LRT) lines in the Klang Valley.

The parcels of land are located in Taman Tun Dr Ismail, Ara Damansara, Jalan Tun Sambanthan in Brickfields, Jalan Dang Wangi, Putra Heights and Taman Melawati.

Prasarana is awarding contracts to property developers on an open tender basis to help develop the land.

It has so far entered into a joint venture between Crest Builder Holdings Bhd and Detik Utuh Sdn Bhd to redevelop the Dang Wangi LRT station in Kuala Lumpur into a mixed commercial development worth RM1.04 billion.

It has also inked a joint-venture agreement with Naza TTDI Ventures Sdn Bhd to develop land in Taman Tun Dr Ismail, Kuala Lumpur.

On reports that its Langkawi cable car business in Kedah, currently run by its subsidiary Panorama Langkawi, would be taken over by the Langkawi Development Authority, Shahril said the two groups are still in talks on how to move forward.

"There is a possibility for it to let go, but we will make an announcement soon," he said yesterday, after inking the joint venture with Naza TTDI Ventures.

Naza eyes more joint projects with Prasarana

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 12, 2012

THE Naza Group of Companies, developer of the RM15 billion KL Metropolis project in Kuala Lumpur, is bidding for more joint-venture developments with Syarikat Prasarana Negara Bhd.

Yesterday, the group's flagship property development arm, Naza TTDI Sdn Bhd, inked its first joint-venture agreement with Prasarana, to build a 26-storey condominium tower on a 0.4ha site in Taman Tun Dr Ismail.

The land cost for the project is around RM12 million and it is expected to generate a gross development value (GDV) of RM153 million.

Prasarana, a public transport provider, has about 8.4ha of undeveloped land along its Ampang and Kelana Jaya light rail transit (LRT) lines.

It is awarding contracts on an open tender basis to help develop its land. This is to increase its non-fare revenue.

According to Prasarana group managing director Datuk Shahril Mokhtar, the company will award soon a contract to develop land in Ara Damansara.

Shahril said tenders to redevelop an abandoned building near its monorail at Jalan Tun Sambanthan will close on July 21.

Prasarana has land in Taman Melawati and Putra Heights and the tenders will be called soon.

The joint venture with Naza TTDI is the second for Prasarana.

The first was a deal it had entered into in March this year with a joint venture between Crest Builder Holdings Bhd and Detik Utuh Sdn Bhd to redevelop the Dang Wangi LRT station into a mixed commercial development worth RM1.04 billion.

Meanwhile, Naza TTDI deputy executive chairman and group managing director SM Faliq SM Nasimuddin said the tower will house 186 condominium units, ranging between 650 sq ft and 1,200 sq ft.

Faliq said the project will be launched early next year and each unit will be priced at more than RM950 per sq ft.

He is bullish on the property market outlook and expects the project to be well received by young executives and investors.

Faliq added that the construction will be completed by the first quarter of 2016.

"We hope this will be a long-term partnership with Prasarana. We are looking at more land to develop with them and will put in our bid when they call for a tender," Faliq said.

The project will be developed on a profit- sharing basis with Naza TTDI Ventures Sdn Bhd taking 70 per cent.

Naza TTDI Ventures is a wholly-owned subsidiary of Naza TTDI, and the company will be undertaking the bulk of the development work.

MMC to take AIRB private

By Sharen Kaur
sharen@nstp.com.my

Published in NST July 10, 2012

MMC Corp Bhd plans to take Johor's top water concessionaire, Aliran Ihsan Resources Bhd (AIRB), private in a deal valued at RM181.12 million, or RM1.84 a share.


AIRB, which is 62.82 per cent-controlled by MMC, is the third largest supplier of treated water in the country.


Its core subsidiaries are Southern Water Corp Sdn Bhd, Southern Water Technology Sdn Bhd, SouthernWater Engineering Sdn Bhd and Aliran Utara Sdn Bhd.


These companies are involved in the operation, maintenance and management of water treatment plants,rehabilitation of water treatment plants and construction of water works.


The offer price of RM1.84 by MMC is a five per cent premium on AIRB's closing price of RM1.75 last Friday. Based on the closing price, AIRB's market capitalisation was RM463 million. 


The securities of both MMC and AIRB were halted from trading yesterday. MMC closed last Friday at RM2.61.


In a filing to Bursa Malaysia yesterday, MMC said it planned to take AIRB private via a selective capitalreduction and repayment exercise.


The plan will result in the reduction of the issued and paid-up share capital of the company from RM264.74million, or 264.7 million shares, to RM83.8 million, or 83.6 million shares.


This is by way of cancelling 181.1 million shares comprising all outstanding AIRB shares amounting to 98.4 million held by the shareholders and 82.7 million held by MMC.


MMC said upon the completion of the exercise, it would hold 83.6 million AIRB shares, representing theentire issued and paid-up capital of the company.


MayBank Investment Bank Bhd is advising MMC on the deal.


MMC Corp group managing director Datuk Hasni Harun said the privatisation exercise was timely, given thenear-term expiry of its main concession/contract, coupled with the illiquidity and lower trading volume ofAIRB shares.


"This move will allow MMC to fully consolidate AIRB's earnings into its accounts and alsoenable both companies to derive more benefits from each other," he said in a statement.


The proposed selective capital reduction and repayment initiative is expected to be completed by the firstquarter of 2013.


Besides AIRB, MMC's other core businesses are Port of Tanjung Pelepas (Malaysia's largest containerterminal), Johor Port (the country's leading multi-purpose port), and Malakoff Group Bhd (the largest local independent power producer)

China company wins RM230m deal

By Sharen Kaur

sharen@nstp.com.my

Published in NST on July 7, 2012

KUALA LUMPUR: OSK Property Holdings Bhd has awarded a RM230 million contract to Beijing Urban Construction Group (BUCG) to redevelop The Atria, which is worth RM1 billion.

The developer is reconstructing The Atria in Damansara Jaya, Selangor, building two 16-level SOFO (Small Office Flexible Office) suites and a four-storey retail podium.

OSK Property bought The Atria, a popular neighbourhood shopping centre, in 2007 for RM75 million. The building was established in the 1980s.

Executive director Tan Sri Ong Leong Huat said the total cost to reconstruct The Atria would be RM280 million and it includes RM50 million to demolish the building, for earthworks and to lay the foundation.

At the signing of an agreement between OSK Property and Beijing Urban Construction Group yesterday, Ong said reconstruction of The Atria had commenced, and works are expected to be completed by end-2013.

"By early 2014, the mall and SOFO will be ready for occupation. We are confident the mall will do well as it is located in the heart of Petaling Jaya. So there is big catchment," said Ong.

Ong is bullish on the outlook of the property market, saying that Malaysian properties are stable, helped by increasing demand for new housing.

He said OSK Property, which has 708ha of undeveloped land currently, will continue to launch new projects, albeit cautiously.

The company, which is majority controlled by the Ong family, has eight on-going projects currently, worth a combined RM5 billion.

Ong said after the spinoff of OSK Property from OSK Holdings Bhd, the company has become even more dynamic.

The company expects significant net profit growth between this year and 2014, thanks to its current unbilled sales of over RM800 million, Ong said.

Last year, its net profit increased by over 100 per cent to around RM26 million, and in 2010, it grew by 120 per cent to some RM12 million.

"We are more focused now in our property development, property management and investment activities," Ong said.

DanaInfra to finalise MRT project cost by Q1

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 4, 2012

KUALA LUMPUR: DANAINFRA Nasional Bhd, the government-backed special funding vehicle, will know how much more funds to raise to finance the first phase of the MY Rapid Transit (MRT) project by the end of the first quarter of next year.

It has been estimated that around RM30 billion worth of funds will have to be sourced to finance the Sungai Buloh-Kajang line, the first phase of the MRT project.

Project owner Mass Rapid Transit Corp Sdn Bhd (MRT Corp) has said the final cost of the Sungai Buloh-Kajang line, will be determined by the end of this year when all the packages are awarded.

MRT Corp has awarded 33 packages worth RM15.5 billion for the Sungai Buloh-Kajang line. It will award the rest of the total 85 packages for the first phase by year-end.

"By the end of the first quarter of next year, we should finalise the total project cost. Then we will know how much is required from us," said Fazlur Rahman Ebrahim, DanaInfra's principal officer.

The estimated financing required by DanaInfra to partly finance the first phase of the MRT project up to June 30 2013 is RM8 billion.

DanaInfra yesterday inked a financing agreement with several banks on the RM8 billion government guaranteed-sukuk financing programme, witnessed by Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah.

The RM8 billion financing programme is the first tranche to partly finance the project.

Fazlur said the first drawdown is expected to be on July 20 2012, with the issuance of Islamic medium-term notes (IMTN) programme of RM2.4 billion, with targeted tenors of 10, 12 and 15 years.

He said RM1 billion of the amount will be used to pay for bridging loans and the rest for the MRT construction. The second issuance of the IMTN of about RM1.5 billion will be in October this year.

"We hope to have a drawdown every quarterly and exhaust the RM8 billion by June 30 2013. The sukuk will be local-driven but we do expect some foreign investors," Fazlur said.

On how DanaInfra will finance the repayment of the sukuk, Fazlur said it would mainly come from annual budget allocations from the government.

AmInvestment Bank Bhd, CIMB Investment Bank Bhd, Maybank Investment Bank Bhd and RHB Investment Bank Bhd are the joint lead arrangers for the financing programme.

DanaInfra will look at various avenues of fund-raising for the remaining financing requirements of the MRT project.

Final viaduct package to be awarded this quarter

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 5, 2012

KUALA LUMPUR: Mass Rapid Transit Corp Sdn Bhd (MRT Corp) will award the final viaduct work package from Taman Mesra to Kajang for the Sungai Buloh-Kajang (SBK) My Rapid Transit (MRT) line in the current quarter.

There are eight viaduct work packages available and seven have been awarded so far.

MRT Corp will also award one depot package (Kajang) for the SBK line by September this year, MRT Corp said in a statement yesterday.

Meanwhile, Syarikat Muhibbah Perniagaan & Pembinaan Sdn Bhd and Trans Resources Corp Sdn Bhd are expected to start construction works soon.

Syarikat Muhibah, a class A Bumiputera company set up more than 20 years ago, is owned by two low profile businessmen, Ku Haris Ku Mahmud and Hamzah Saadon.

The company had secured a RM1.09 billion job to build viaduct guideways from the Sungai Buloh to Kota Damansara stations.

The viaduct works are for the first stretch of the SBK line and pass through the Sungai Buloh town and the Kota Damansara area.

The works cover the alignment of four MRT stations, namely Sungai Buloh, Kg Baru Sungai Buloh, Rubber Research Institute (RRI), and Kota Damansara.

"The works are expected to be completed in the fourth quarter of 2014," said MRT Corp director for strategic communications and public relations, Amir Mahmood Razak.

Trans Resources' contract of RM459.9 million is to build a depot and related buildings at RRI in Sungai Buloh, covering 65 hectares.

Amir said the company is expected to complete its job by the end of first quarter of 2016.

"We are confident that both Syarikat Muhibah and Trans Resources have the capacity and capabilities in carrying out the work packages according to time and cost," Amir said.

So far, MRT Corp has awarded 33 contracts valued at RM15.5 billion for the SBK line. There are 21 contracts in the process of evaluation and they will be awarded soon. The remaining 31 contracts will be awarded by the end of this year.

MMC to submit proposal on KTMB

By Sharen Kaur
sharen@nstp.com.my
Published in NST on July 5, 2012

NEXT MONTH: Govt to get privatisation, operational plans

MMC Corp Bhd plans to submit next month a proposal on the privatisation of national railway company Keretapi Tanah Melayu Bhd (KTMB) to the government.

Group managing director, Datuk Hasni Harun said the proposal is subject to the result of due diligence study conducted by the company which is expected to be completed by the end of the month.

"We will also submit an operational plan together with the proposal. The operational plan will indicate how we intend to run KTMB," Hasni told Business Times in an interview recently.

KTMB suffered some RM1.45 billion in accumulative net losses up until 2008.
It is further believed that the national railway company cannot "afford" to pay back its own operational costs and loans.

The operator has been mostly bleeding red ink since it was corporatised in 1992 due to high operating costs.

KTMB did rake in a net profit of between RM9 million and RM15 million from 1993 to 1995, before falling back into the red again in the following years.

This is not the first attempt by MMC to take over KTMB's operations as MMC and Gamuda Bhd were eyeing to privatise and take over KTMB's assets in 2003.

The consortium had held preliminary discussions with the government but nothing materialised.

Business Times had previously reported that 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, 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.