JAKS Resources, Zelan JV Win RM766mil SUKE Highway Contracts

Thursday, 4th August 2016
The Star Online 

KUALA LUMPUR: The controversial Sungai Besi-Ulu Kelang Elevated Expressway (SUKE) project looks set to take off with the award of construction contracts worth RM766.11mil on Thursday to JAKS Resources Bhd and Zelan–Hasrat Sedaya Consortium.

Construction of the seven-storey terminal, to be integrated with the existing Gombak LRT station, will cost some RM307.37 million and is expected to take 27 months.

"The GITT will be a major transportation hub [positioned] to take over the existing operations of the eastbound intercity buses and taxis as well as intracity buses and taxis for the Klang Valley," Zelan said in a statement yesterday. "[GITT] will also serve as a temporary hub for the operations of the northbound intercity buses and taxis," it added.

The build-lease-manage-operate-transfer agreement is conditional upon Tegas being provided RM260.14 million as project financing by Bank Pembangunan Malaysia Bhd. A letter dated Dec 7, 2011, offering RM260.14 million project financing facility has been issued to Tegas by the bank, Zelan said.

The agreement, which comes with a concession period of 25 years and three months, is also conditional upon the revocation of the project land's "Malay reservation" status.

The government will pay Tegas an initial payment of RM64.18 million within 30 days of the issuance of the certificate of acceptance (CoA), which confirms completion of construction works. Tegas will also receive a monthly concession charge of RM3.12 million from the government in consideration of the tasks of construction works, facility operation and asset management services it undertakes. The first payment will be one month after the issuance of the CoA.

In a filing with Bursa Malaysia, JAKS Resources Bhd said the highway concessionaire Projek Lintasan Kota Holdings Sdn Bhd’s (Prolintas) unit, Turnpike Synergy Sdn Bhd, had awarded its wholly owned subsidiary JAKS Sdn Bhd a RM508.5mil contract.

In a separate filing on the same day, Zelan Bhd said Turnpike had given Zelan–Hasrat Sedaya Consortium, in which its unit Zelan Construction Sdn Bhd is a member, a letter of acceptance worth RM257.61mil.

Both contracts are for mainline and associated works and have a duration of 30 months, with completion targeted by Feb 28, 2019. According to Zelan, the date for the site possession is Aug 29, 2016.

Zelan said the works awarded to it and its partner, Hasrat Sedaya Sdn Bhd, would cover about 1.7km along Jalan Taman Putra. JAKS, however, did not mention the stretch that it would cover.

Prolintas, a unit of fund manager Permodalan Nasional Bhd, was given the concession for the proposed 31.8km three-lane, dual carriageway expressway a few years ago. However, the project has drawn protests by residents living in areas where the highway would pass through as it would entail forced acquisitions of homes and land.

In April, it was reported that the Say No To SUKE group made an application for a judicial review on the project to stop further property acquisition activities.

In Thursday’s announcement, JAKS said the contract from Turnpike was expected to contribute positively to the revenue and earnings of the group for the financial year ending Dec 31, 2016 and the following financial years within the duration of the contract.

It added that there would be no effect on the group’s gearing and the deal would not have material effect on the net assets per share for this financial year ending Dec 31, 2016.

JAKS shares shed 3.5 sen to close at 92 sen on Thursday with 1.2 million shares changing hands. Zelan, meanwhile, gained 2 sen to 19 sen, with 15.5 milliom shares traded.

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