Sources say MRL would not have signed ECRL contract given a choice TheStar Sat, Jun 30, 2018 - 10 hours ago
MALAYSIA Rail Link Sdn Bhd (MRL) would not have signed the East Coast Rail Link (ECRL) project contract if given a choice in the first place, according to sources.
A source says that MRL representatives revealed this to the Council of Eminent Persons (CEP), who noted that the contract was heavily skewed against Malaysia’s favour.
“Among the reasons was the 15% upfront payment. After information was revealed to the public of the unfavourable contract terms to Malaysia, even China government officials were quite embarrassed about it and agreed to changes in the agreement,” says a source.
It was reported earlier that the previous Barisan Nasional government signed for an entire project amount of RM66bil, and a 15% upfront fee amounted to around RM10bil.
After further scrutiny from the new government, the ECRL project will now undergo cost cutting measures that will see some RM26bil or more being shaved off the cost of the entire project.
“The project which was mooted by the previous BN government would have to be carried out by the new government because commitments have already been put into place. A cancellation would entail higher additional costs of more than RM21bil,” the source says. “So given this scenario, despite the new government having the right to cancel the ECRL project if it went against national interests they have decided to proceed,” he adds.
After the proposed cost cutting measures, costs for the ECRL project is expected to drop to RM40bil from the initial RM66bil.
The effect of the cost cutting would now see both Phase 2 and 3 of the ECRL project being cancelled, the sources say.
Phase 2 is the railway route from Gombak to Port Klang costing some RM9bil while Phase 3 is the double tracking portion & route to Pengkalan Kubor that costs RM11bil.
There are also proposals to only defer the Phase 2 of the project and to eventually award them to local contractors in an open tender. “But this is still being studied in-depth but the priority is to cut costs at this stage until the RM1 trillion debts come under control,” the source says. There are also other adjustments that will be made to the finer details of the project.
Among the proposed changes to the present ECRL project include to cut the total number of stations and to do away with the smaller ones.
“The aim of this is to really cut costs as there are grounds to believe that the mainland Chinese have over-designed it if the smaller details are observed,” a source says.
It is also understood that the number of tunnels will also be slashed from 50 to around 25.
“All these tunnels had exponentially added to costs and thus an alternate route without tunnels but surface railway will likely be chosen so that it will be more friendly to costs. While the design or even the total number of bridges will also be re-looked again,” he adds.
According to najibrazak.com, the ECRL had initially incorporated a total length of 100km in bridges with 50km of tunnel length that will cross the Titiwangsa Range.
MRL said earlier in the month that progress for the project is near 15% and they project team has already set up base and satellite camps in all eight sections of the project, land acquisition, site clearing and the construction of road access.
The company also said then that the construction had also included multiple road access of about 95km in length and temporary bridges spanning 1,067 metres that have been constructed at many of the ECRL project sites in the east coast states.
Other areas that will be reconsidered or re-looked include number of depots and the size of these depots.
The sources also said that the mainland Chinese have also offered to build a rail school for knowledge transfer purposes.
Changes will also be seen in the composition of local contractors participation so that it will be a more Malaysian project.
“Accordingly, the project managers also wanted to shed the image that this is purely a mainland China project that is being merely being deployed to Malaysia. I believe the Chinese contractors were in agreement and thus local content is expected to increase to at least 45% from 30% before,” the source says. The source said that the proposal was to allow for all civil, tracking and some systems works to be done by local contractors.
“The mainland Chinese have agreed in principle that this is acceptable since it is being built on Malaysian land. It will also give more stability to the ECRL project as it eliminates foreign exchange risks,” the source says.
"The effect of the cost cutting would now see both Phase 2 and 3 of the ECRL project being cancelled, the sources say." - this is not cost cutting. These are scope of works trimming exercise from original scopes.
"It is also understood that the number of tunnels will also be slashed from 50 to around 25." - this statement, yes, it is the cost cutting if they can maintain original intend.
I actually keen to know who is the QS who can do the cost saving up to 33% while maintaining the original scopes & intends without any V.O upon project completion. I think whole market keen to know coz if proven, they are scarce & valuable to most the builders.
I also keen to know who was the existing QS, if the above cost trimming is indeed feasible & can materialized, then we know which who to avoid.
What I only worry is, initially the cost cutting sound nice & wonderful with the figure shown. However, along the ways, the variation scopes come in along the ways, in the end, we ended up at square one position. This scenario happens most of the times.
The saving on the ECRL, I doubt government will get the cash coz this project if finance by debt. It will only lessen our country debt if it materialized. There won't money gain in government's treasury on this exercise, the money never reach our country anyway but from Exim direct to the China Contractor.
For Splash deal to materialize, I also believe it will be finance using debt also since it cost billions in value.
Just be alert if there is any bond / sukuk issue & see the size of the fund raise.
for next probably 3 to 4 years the government likely manage only to do damage control done by bn government .....hope the cleaning up will restore investors alike trust n confident ......
The weekly edge list the top winners year to date (for 6 months period 2018) for counters that market cap fall within the range of rm500 mil and rm1 bil
1st place: Borneo aqua harvest with total return 78% 2nd place: cck consolidated with total return 68% 3rd place : kps with total return 41%
congrate those kps holders. By year end 12 months , maybe reach 1st place.
Selangor to impose 'reasonable' water tariffs after restructuring – Azmin; By Bernama | 2018-07-01 20:36:38
KUALA LUMPUR (July 1): The Selangor state government will impose reasonable water tariffs once the restructuring of the state’s water industry has been finalised, which is soon, said Economic Affairs Minister Datuk Seri Mohamed Azmin Ali.
He said Prime Minister Tun Dr Mahathir Mohamad and Selangor Menteri Besar Amirudin Shari met recently to discuss the matter and the restructuring of the state’s water industry would be finalised in accordance with the master agreement signed in 2014.
“The restructuring of the water industry services in Selangor has been delayed for a long time because of the lack of understanding and cooperation between the previous federal government and the state government, but now it will run smoothly as there is good cooperation between the state and federal governments under Pakatan Harapan,” said Azmin, who is also Member of Parliament for Gombak.
He said this at a press conference after launching the Gombak Setia Citizens' Service Centre, and attending an Aidilfitri celebration organised by the Selangor government in Gombak today.
Once we have identified a good potential stock and bought it, BE Patient. It may take awhile to go UP. KPS have some many good businesses and the state government support, how can we go wrong on this one. All the best to KPS shareholders
KPS’ subsidiary clinches RM20.0 million Air Selangor pipe replacement contract • Smartpipe Technology Sdn Bhd (SPT) to replace existing pipeworks with Mild Steel (MS), Ductile Iron (DI) pipes and High-Density Polyethylene (HDPE) fixtures
Shah Alam, Malaysia, 2 July 2018 – Diversified group Kumpulan Perangsang Selangor Berhad (KPS, Bursa: 5843; Bloomberg: KUPS:MK; Reuters: KPSB.KL) announced that its subsidiary, SPT secured RM20.0 million contract from Pengurusan Air Selangor Sdn Bhd (“Air Selangor”) to replace existing pipeworks in Hulu Langat and Kuala Lumpur. The key scope includes supplying and installing MS pipes, install DI pipes and HDPE pipe fixtures. The contract works will cover 16.3 kilometres and will be implemented in seven areas, namely Jalan Cheras – Klang, Hulu Langat Road, Jalan Cheras Hulu Langat Road, Pumping main Taman Segar, Pumping main Bangsar Ville, Jalan Jintan Taman Supreme, Pumping main Sri Hartamas and Kg. Seri Delima. The contract is estimated to be completed within 15 months from its commencement date on 9 July 2018 and hence is expected to contribute positively to the Perangsang Selangor Group for the financial years ending 31 December 2018 and 2019. Ahmad Fariz Hassan, Chief Executive Officer of KPS said: “In comparison to the traditional Asbestos Cement (AC) pipes, the right use of MS, DI and HDPE pipes at the right locations would highly reduce the potential occurrence of water leakages while being cost effective at the same time. As such, this contract win from Air Selangor reinforces the Selangor state’s steadfast commitment to reducing its non-revenue water (NRW) rates, as well as attaining better water management to safeguard Selangorians’ well-being.” Air Selangor had reported in January 2018 that it had successfully reduced NRW rates in the Selangor state from 32.6% in 2015 to 30.1% by end-2017, saving 82 million litres of water per day. It aims to reduce the NRW rate further to 28% by end-2020.
KPS holds 60.0% equity stake in SPT via its wholly-owned subsidiary, Nadi Biru Sdn Bhd. SPT is an engineering company offering an integrated solution to water and other utility companies for the maintenance of their pipeline assets.
16 km will provide contract about 20 million More area in selangor need pipe replacement due to Selangor has been neglected by BN since a decade. This is only pipe replacement. Road repair project has not included yet.
Time to put Selangor back to a good state. Kps is getting more hotter and hotter.
piping contractors gave me a estimate that i would required 5-7 billion ringgit to replace 30year-old clay and cement pipes-----another 4-6 billion to replace 8inches to 2feet metal pipe in Selangor alone ( 10years program if start from 2016 ) Price increases if push back further
Hopefully, changing of the pipe will improve the NRW which is considered a waste and improve of the efficiency. May be it should be a KPI for water companies. Ha....
Selangor water restructuring to end within a month, Xavier promises Author: savemalaysia | Publish date: Tue, 3 Jul 2018, 12:47 PM
PUTRAJAYA, July 3 — Newly sworn-in Water, Land and Natural Resources Minister Xavier Jayakumar promised today to finalise the long-standing water restructuring exercise in Selangor within a month.
He told reporters on his first day at the ministry that this was his current priority.
“The last day for the restructuring exercise is tomorrow but after speaking to the heads of departments, we have agreed to postpone the exercise for another a month.
“Rest assured this water deal, which among others include acquiring Syarikat Pengeluar Air Selangor Sdn Bhd will be resolved within a month,” he said.
However, Xavier did not disclose any details on the cost for acquiring Splash.
Under the current restructuring exercise, Splash is the sole remaining water concessionaire that has yet to be consolidated into the state water industry.
Separately, the minister said he will also look into extending the bauxite moratorium in Pahang.
His ministry is consolidates some roles previously handled by the Energy, Green Technology and Water (Kettha), Natural Resource and Environment (NRE) Science, Technology and Innovation (MOSTI) ministries.
Xavier explained that this was why his ministry has two secretaries-general now.
“There will only be one secretary-general in the near future but I will leave this matter to the Chief Secretary to decide,” he said when asked about this.
New IPO: Building management systems (BMS), solar thermal systems and energy-saving services provider, Solar District Cooling Bhd aims to list on the Ace Market!
MQ Trader 716 views | 4 d ago
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New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 14000 views | 12 d ago
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New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
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....
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Posted by ks5S > 2018-06-30 10:14 | Report Abuse
Sources say MRL would not have signed ECRL contract given a choice
TheStar Sat, Jun 30, 2018 - 10 hours ago
MALAYSIA Rail Link Sdn Bhd (MRL) would not have signed the East Coast Rail Link (ECRL) project contract if given a choice in the first place, according to sources.
A source says that MRL representatives revealed this to the Council of Eminent Persons (CEP), who noted that the contract was heavily skewed against Malaysia’s favour.
“Among the reasons was the 15% upfront payment. After information was revealed to the public of the unfavourable contract terms to Malaysia, even China government officials were quite embarrassed about it and agreed to changes in the agreement,” says a source.
It was reported earlier that the previous Barisan Nasional government signed for an entire project amount of RM66bil, and a 15% upfront fee amounted to around RM10bil.
After further scrutiny from the new government, the ECRL project will now undergo cost cutting measures that will see some RM26bil or more being shaved off the cost of the entire project.
“The project which was mooted by the previous BN government would have to be carried out by the new government because commitments have already been put into place. A cancellation would entail higher additional costs of more than RM21bil,” the source says. “So given this scenario, despite the new government having the right to cancel the ECRL project if it went against national interests they have decided to proceed,” he adds.
After the proposed cost cutting measures, costs for the ECRL project is expected to drop to RM40bil from the initial RM66bil.
The effect of the cost cutting would now see both Phase 2 and 3 of the ECRL project being cancelled, the sources say.
Phase 2 is the railway route from Gombak to Port Klang costing some RM9bil while Phase 3 is the double tracking portion & route to Pengkalan Kubor that costs RM11bil.
There are also proposals to only defer the Phase 2 of the project and to eventually award them to local contractors in an open tender. “But this is still being studied in-depth but the priority is to cut costs at this stage until the RM1 trillion debts come under control,” the source says. There are also other adjustments that will be made to the finer details of the project.
Among the proposed changes to the present ECRL project include to cut the total number of stations and to do away with the smaller ones.
“The aim of this is to really cut costs as there are grounds to believe that the mainland Chinese have over-designed it if the smaller details are observed,” a source says.
It is also understood that the number of tunnels will also be slashed from 50 to around 25.
“All these tunnels had exponentially added to costs and thus an alternate route without tunnels but surface railway will likely be chosen so that it will be more friendly to costs. While the design or even the total number of bridges will also be re-looked again,” he adds.
According to najibrazak.com, the ECRL had initially incorporated a total length of 100km in bridges with 50km of tunnel length that will cross the Titiwangsa Range.
MRL said earlier in the month that progress for the project is near 15% and they project team has already set up base and satellite camps in all eight sections of the project, land acquisition, site clearing and the construction of road access.
The company also said then that the construction had also included multiple road access of about 95km in length and temporary bridges spanning 1,067 metres that have been constructed at many of the ECRL project sites in the east coast states.
Other areas that will be reconsidered or re-looked include number of depots and the size of these depots.
The sources also said that the mainland Chinese have also offered to build a rail school for knowledge transfer purposes.
Changes will also be seen in the composition of local contractors participation so that it will be a more Malaysian project.
“Accordingly, the project managers also wanted to shed the image that this is purely a mainland China project that is being merely being deployed to Malaysia. I believe the Chinese contractors were in agreement and thus local content is expected to increase to at least 45% from 30% before,” the source says. The source said that the proposal was to allow for all civil, tracking and some systems works to be done by local contractors.
“The mainland Chinese have agreed in principle that this is acceptable since it is being built on Malaysian land. It will also give more stability to the ECRL project as it eliminates foreign exchange risks,” the source says.