IT is now a two-horse race between Mudajaya Group Bhd and Bina Puri Holdings Bhd for the RM2 billion job to build the 14.9km Kinrara-Damansara Expressway (Kidex), industry sources say.
While five companies have been shortlisted, the two parties are said to be the front runners to bag the contract.
Bina Puri is partnering China Harbour Engineering Co Ltd to bid for the contract to build the elevated highway in the Klang Valley, while Mudajaya’s is a standalone bid.
The highway has been controversial, with many residents’ associations opposing its construction.
The companies involved and project management consultant HSS Integrated Sdn Bhd are tight-lipped about the details.
HSS’s website indicates that the company is the project management consultant for the job, which involves the construction of a fully elevated dual-lane expressway linking
Damansara from the NKVE Damansara toll to the Bukit Jalil Highway near Kinrara.
At RM2 billion for 14.9km, the cost of the highway works out to about RM134 million per km, which is high, but then again, the highway is elevated.
Both Mudajaya and Bina Puri are known for their prowess in the construction sector while China Harbour Engineering was the main contractor for the recently completed Sultan Abdul Halim Mu’adzam Shah bridge, or better known as the Second Penang Bridge.
It seems that there is little that separates the two local players in terms of ability.
However, for Mudajaya, the contract appears essential as its order book has depleted to about RM1.2 billion, with no jobs secured last year.
For FY2013 ended Dec 31, the company posted a net profit of RM151.2 million on revenue of RM1.5 billion. The RM1.2 billion order book translates into some 80% of its revenue for FY2013.
Analysts attribute the shrinking order book to the company’s move not to reduce its margins when bidding for jobs, and its preference for large-scale high-margin projects.
Meanwhile, analysts expect Mudajaya, which specialises in power plant construction, to be the beneficiary of 1Malaysia Development Bhd’s (1MDB) recently secured RM11 billion Project 3B.
Other jobs Mudajaya is seeking include civil works for Janamanjung 5, which could be worth about RM1 billion, and a land swap deal valued at RM200 million involving the army.
The highway projects the company has been involved in include the KL-Kuala Selangor Expressway Package 1 from Assam Jawa to Kundang and Package 2 from Kundang to Taman Rimba Templer; Projek Lebuhraya Kemuning-Shah Alam, with the company building the stretch from Section 35 Shah Alam Interchange to Section 24; the Malaysia-Singapore Second Crossing; and portions of Lebuhraya Damansara-Puchong.
The company has also secured several highway construction jobs in India, including the strengthening and expanding of the Pune-Nasik Road in Maharashtra to four lanes, and the strengthening and construction of four lanes at the Pune-Solapur-Hyderabad Road in Maharashtra.
Mudajaya’s share price has declined from a high of RM3 in November last year to a low of RM2.62 in February. It closed at RM2.69 last Friday.
Over at Bina Puri, the company built the RM958 million 33km dual-carriageway KL-Kuala Selangor Expressway linking Ijok to Taman Rimba Templer, portions of the Johor Baru Eastern Dispersal Link, the Kota Kinabalu-Sulaman Coastal Road in Sabah, and the road from Salak Tinggi to KLIA, among others.
In addition to several jobs in India and Brunei, Bina Puri constructed the South and North East Approach Bridges of Landside Road Systems for Suvarnabhumi Airport in Thailand.
For FY2013 ended Dec 31, the company posted a net profit of RM5.5 million on sales of RM1 billion. Its order book stands at RM1.7 billion.
Bina Puri’s share price staged a strong rebound recently, rising from 69 sen on March 28 to 78 sen last Friday.
Kidex Sdn Bhd is the concessionaire for the highway. Its shareholding structure draws interest. A check on the Companies Commission of Malaysia (CCM) indicates that Kidex’s shareholders are Emrail Sdn Bhd with 70% equity interest and Zabima Engineering and Construction Sdn Bhd with a 30% stake.
Emrail, meanwhile, is 42.9% controlled by Loh & Loh Corp Bhd and 22.9% by Magniplan Sdn Bhd, with both Noblemax Resources Sdn Bhd and Datuk Mohd Hafarizam Harun holding 17.1% each. Mohd Hafarizam is a legal adviser to Umno.
Magniplan’s shareholders are Mohd Hafarizam, who has a 95% stake, and Tan Sri Hari Narayanan with the remainder 5%.
Noblemax’s shareholders are Hari Narayanan with 51% equity interest and his wife Puan Sri Vimala Govindasamy, who holds the rest of the stake.
Loh & Loh, according to CCM, is wholly owned by Selesa Produktif Sdn Bhd, which in turn is equally owned by Ring Excellence Sdn Bhd and Collective Bridge Sdn Bhd.
CCM data reveals that Ring Excellence is almost wholly owned by Datuk Che Abdullah @ Rashidi Che Omar, while Mohd Faizuk Ibrahim has a single share in the company.
Che Abdullah is linked to Tadmax Resources Bhd (formerly known as Wijaya Baru Global Bhd), where he is an executive director. He was appointed to the board in mid-2011.
Collective Bridge, meanwhile, is almost wholly owned by Tengku Rahimah Sultan Mahmud with Ishak Ahmad holding a single share. Rahimah was previously an independent director of water concessionaire Puncak Niaga Holdings Bhd.
Loh & Loh was de-listed after it was privatised by Javace Sdn Bhd and Sheikh Tarek Essam Ahmad Obaid in 2010. He is the CEO of PetroSaudi International Ltd, a company linked to 1MDB.
In 2008, Loh & Loh was taken over from the Loh family by UBG Bhd (formerly known as Utama Banking Group Bhd, a Sarawak-based outfit which at one time controlled RHB Bank). Among the people behind the takeover in 2008 was Low Taek Jho @ Jho Low, who went on to gain fame internationally with his lavish lifestyle and his association with 1MDB.
Zabima Engineering and Construction, meanwhile, is 49.5% controlled by Admi Othman and 48% controlled by Tun Zaki Tun Azmi, with the remainder 2.5% held by Mohd Hafarizam. Zaki is the former chief justice of Malaysia.
This article first appeared in The Edge Malaysia Weekly, on April 7, 2014.