This article first appeared in The Edge Financial Daily on March 27, 2018

KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) has bagged an RM11 billion contract to undertake project management services for a proposed mixed development in Bukit Jalil here.

This is the group’s second major contract win in a week. Last Thursday, MRCB bagged a RM7.46 billion management contract for a 64.3-acre (26.02ha) town centre development of the massive Kwasa Damansara township in Sungai Buloh, Selangor in a joint venture with the Employees Provident Fund (EPF), which owns 34.87% of MRCB shares.

The proposed development, spanning 20 years, is expected to be a residential and commercial hub, with a plot ratio of 1:6.5. It will feature four development plots, which consist of office towers, hotels, retail shops and mall, small office/virtual office, small office/home office, serviced apartments and residential towers.

In a filing with Bursa Malaysia yesterday, MRCB said its wholly-owned subsidiary MRCB Land Sdn Bhd has entered into a management contract with Bukit Jalil Sentral Property Sdn Bhd (BJSP), a related party, for the appointment of MRCB Land as the management contractor for the design and construction of the mixed development to be carried out on three parcels of leasehold land.

The contract is regarded as a related-party transaction as BJSP is a wholly-owned unit of Rukun Juang Sdn Bhd, which in turn is an 85%-owned subsidiary of MRCB Land.

MRCB also entered into a subscription and shareholders’ agreement with Rukun Juang Sdn Bhd (RJSB), Tanjung Wibawa Sdn Bhd (TWSB) and BJSP where RJSB and TWSB will co-invest in BJSP for purposes of jointly developing the land totalling 76.14 acres. RJSB will also dispose of the parcels of land to BJSP for up to RM1.43 billion.

Upon completion of the proposed subscription, EPF, via its wholly-owned subsidiary TWSB, will hold an 80% stake in BJSP, while the remaining 20% equity interest will be held by RJSB.

Under the management contract, MRCB Land will also appoint MRCB Builders Sdn Bhd, another wholly-owned subsidiary of MRCB, to undertake engineering, procurement, construction and commissioning work for one or more of the four development plots.

On May 31 last year, MRCB announced that it was partnering EPF to develop the land, which has a potential gross development value of RM20.67 billion, over a 20-year period beginning 2019.

“The development will not only allow the group to enhance its construction and engineering project, but is also expected to provide the group with a steady stream of income.