LGE is smarter Finance Minister. He doesn't want our debts become RM 1.3-1.5 trillion if continue ECRL.
GoodBoy ECRL told to suspend all works immediately ... This will include all activities under the contract' s engineering, procurement, construction and commissioning areas ... 04/07/2018 16:43
Enter oil? I think this company able to enter any business since they expanded from meter business to constructions. Got money, on top of that, good leader, surely they will penetrate new business.
Construction cost, which has gone up to RM15bil, under tight scrutiny
PETALING JAYA: Prasarana Malaysia Bhd is considering taking over the construction of the Light Rapid Transit line 3 (LRT 3) from its project delivery partner (PDP) to curb its spiraling cost.
According to sources, the government is reviewing the project as cost has ballooned from the initial estimate of RM9bil in 2015 to more than RM15bil.
“The government is expected to make a decision on the project soon,” a source said.
Construction at the site had already reached 10%, with most of the work contracts awarded.
It is estimated that more than RM15bil worth of construction jobs had been farmed out to contractors, including a RM1.1bil underground package awarded to IJM Corp Bhd in March.
The 37km extension line from Bandar Utama to Klang through Shah Alam, when it was launched in 2015, was projected to cost RM10bil, including RM1bil set aside for land acquisitions.
Reducing the size of the project would help to cut down cost. Other options being considered, sources said, included reverting to the turnkey model to complete the project.
In 2015, Prasarana appointed Malaysian Resources Corp Bhd (MRCB) and George Kent (M) Bhd as the PDP for the LRT 3 project at an approved construction budget of RM9bil.
The PDP fee for the LRT 3 project, at its construction cost of RM15bil, would amount to RM900mil.
Kenanga Research, in a report last Friday, said with most of the work packages for the LRT 3 having been awarded, it was likely that the construction cost has blown past its original target.
With the ongoing project cost review, Kenanga said there is uncertainty about the continuity of the LRT 3 project despite most of the contracts having been awarded.
As the PDP partner, MRCB and George Kent are responsible for the design and construction of the LRT 3 project. The PDP partner will also assume the risk of cost overruns or delays.
However, despite the award of the PDP back in 2015, the total construction cost of the project has yet to be finalised.
Prasarana, which is a government-owned company, has the approval to raise up to RM10bil in debts to pay for the project. Bursting the budget would require the company to seek fresh Cabinet approval for additional funds.
“There is also a possibility that the project might be shelved given the current financial constraints,” one source said.
It is believed that that design changes to the original LRT 3 plan has contributed to the project’s rising cost.
For example, some of the 26 stations along the line were upgraded to accommodate new features and a bigger passenger capacity at a substantial increase in construction cost.
The cost of some stations have increased from an initial RM80mil to almost RM200mil.
The LRT 3 is the first project by Prasarana to be undertaken based on the PDP model that had been successful in delivering the Klang Valley Mass Rapid Transit (KVMRT) project.
The PDP model was introduced in 2012 for the construction of the KVMRT project, which was awarded to a joint venture (JV) between MMC
The relationship between China Communications Construstion Co Ltd and its JV partner GKent is understood to be fraying at the seams because of issues. The two companies have a JV called CCCC-GKent JV on a 51:49 basis.
The cause of the problems is understood to be the RM1 billion systems work package for the Sungai-Buloh-Serdang-Putrajaya MRT2, which the two companies had bagged in Aug 2016. MRT Corp officials said they are watching them closely. Without any replies from GKent, it is difficult to gauge how issues concerning the contract may impact the company or its RM5.38 billion order book.
Meanwhile CCCC has been-GKent JV comes on the back of the Malaysian government suspending work on the RM81 billion ECRL. It is also worth nothing that CCCC in partnership with CCCC Sdn Bhd, might have been one of two companies shortlisted by the BN government for the construction of the RM45 billion MRT3. GKent’s chairman Tan Sri Tan Kay Hock, who controls 42.21% stake onf GKent is lcose associate to Najib. GKent’s success in recent years was the result of strong political connections. Its fortunes changed when from dealing in water meters and diversified into rail construction, largely JV Ampang LRT project, LRT3 and other lucrative large rail jobs. However since the BN government was toppled, things have taken a turn for the worst at GKent and the market has reacted to the uncertainty surrounding the company.
Till 06 July 2018, the company had shed 70% since GE14. The sell down in GKent can be attributed to its weak earnings prospects. With its future projects more or less gone, most market watchers were banking on CCCC-GKEnt JV’s MRT2 contract to maintain its earnings. Now (July 2018) even that seems to be in trouble.
While its outlook appears dim, GKent had cash and bank balances of RM396.74 million as at April 2018 while its short term borrowings stood at RM51.01 million and RM2.21 million. Retained earnings amounted to RM257.95 million.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
m_aloha
607 posts
Posted by m_aloha > 2018-07-04 17:43 | Report Abuse
Nice...operator start the engine