“A consortium comprising Salcon Bhd, MMC Corp Bhd and Ahmad Zaki Resources Bhd (AZRB) will share the RM993.88 million contract to build the plant, which can treat up to 1.13 billion litres of water per day.”
“Salcon MMCB AZSB JV Sdn Bhd has received a letter of acceptance issued by Pengurusan Aset Air Bhd for the proposed development of the Langat 2 Water Treatment Plan and Water Reticulation System for RM993.888 million.
The project duration is 36 months, MMC said in a filing to Bursa Malaysia today.
Salcon MMCB AZSB JV is a jointly controlled entity of Salcon Engineering Bhd, a wholly-owned subsidiary of Salcon Bhd”.
RM1b Langat 2 job
LANDMARK WATER CONTRACT: Salcon, MMC Corp and Ahmad Zaki joint venture to build first phase of plant
WORKS on the Langat 2 water treatment plant project in Selangor will kick off soon after Pengurusan Aset Air Bhd (PAAB) awarded a nearly RM1 billion contract to three listed companies on Wednesday.
A consortium comprising Salcon Bhd, MMC Corp Bhd and Ahmad Zaki Resources Bhd (AZRB) will share the RM993.88 million contract to build the plant, which can treat up to 1.13 billion litres of water per day.
The contract is said to be the largest single water contract in Malaysia’s history.
The Letter of Acceptance was received from PAAB on Wednesday for Phase One of Package 2A of the project, the three companies said in separate statements to Bursa Malaysia yesterday.
They have formed a joint venture, Salcon MMCB AZSB JV Sdn Bhd, to undertake the project.
Salcon, through its unit Salcon Engineering Bhd, owns a 36 per cent stake in the joint venture, making it the lead partner. MMC Corp and AZRB’s unit, Ahmad Zaki Sdn Bhd, own the remaining 34 and 30 per cent stakes, respectively.
The plant is scheduled to be completed in April 2017, they said.
“This is a landmark win for Salcon as the Langat 2 water treatment plant is the largest single water contract in the history of the Malaysian water industry,” said Salcon executive director Datuk Eddy Leong Kok Wah.
The job will boost Salcon’s order book to RM930 million, he added.
The Langat 2 plant will have the capacity to meet demand for water supply until 2025.
Raw water for the plant will be sourced from Sungai Semantan in Pahang through a transfer tunnel under the Pahang-Selangor raw water transfer project, currently undertaken by the Federal Government.
The project was initially scheduled for construction in 2010 but it was delayed due to the Selangor government’s refusal to issue a development order.
The state government finally agreed to allow the Langat 2 plant to be built via a memorandum of understanding (MoU) signed in February by Menteri Besar Tan Sri Khalid Ibrahim and Energy, Water and Green Technology Minister Datuk Seri Dr Maximus Ongkili.
Under the MoU, Selangor will take over the operations of four water concessionaires, namely Syarikat Bekalan Air Selangor Bhd (Syabas), Puncak Niaga Sdn Bhd (PNSB), Konsortium Abbas Sdn Bhd (Abbas) and Syarikat Pengeluar Air Selangor Holdings Bhd (Splash), and place them under state-owned Kumpulan Darul Ehsan Bhd (KDEB).
The acquisition of the water supply infrastructure carries a price tag of RM9.65 billion. The offer was based on a 12 per cent return on equity per year and water assets to be acquired by PAAB.
Selangor also agreed to approve the development order for the plant and ensure that all approvals are given within 30 days from February 26.
Puncak Niaga Holdings Bhd controls PNSB, a water treatment plant operator, and Syabas, which has been mandated to distribute water here as well as in Selangor and Putrajaya.
Puncak Niaga is the biggest water treatment operator in Selangor by virtue of its 100 per cent ownership of PNSB and 70 per cent interest in Syabas.
Splash, meanwhile, is 40 per cent-controlled by Gamuda Bhd, 30 per cent by Kumpulan Perangsang Selangor Bhd (KPS) and the rest by the Sweetwater Alliance Sdn Bhd.
The fourth water treatment concessionaire, Abass, is almost wholly-owned by KPS, which, in turn, is a 57.9 per cent subsidiary of KDEB.
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