GEORGETOWN: Bursa Malaysia-listed construction giants Gamuda Bhd, IJM Corp Bhd, WCT Holdings Bhd and government-linked Prasarana Malaysia Bhd were among the six that submitted bids to participate as project delivery partner (PDP) in the RM27 billion Penang Transport Master Plan (TMP), The Edge Financial Daily has learnt.

On Feb 16, Penang Local Government, Traffic Management and Flood Mitigation Committee chairman Chow Kon Yeow said only six out of 55 local and foreign companies that took the forms had submitted their bids when the request for the proposal (RFP) to be the PDP for the Penang TMP closed.

According to a source, the two others were Singapore-based CGC Group Pte Ltd, and two Hong Kong investors represented by independent strategic adviser Datuk Dr Nik Zamri Majid. While Prasarana itself is not a construction player, it could form a partnership to participate as PDP.

WCT’s (fundamental: 0.6; valuation: 1.8) corporate and finance head Chong Kian Fah said the company is able to fulfil the requirements of the Penang TMP, including the federal licensing condition for public transport and federal highways.

He said the state told the RFP submitters that they will be required to foot about RM16 billion to RM17 billion of the cost of the projects to be developed in the state.

To part finance the Penang TMP, the PDP will be awarded the reclamation rights to the 1,500-acre (607ha) Middlebank, located between Penang island and the Sungai Pinang river mouth.

The land swap business model is similar to the agreement with Consortium Zenith BUCG Sdn Bhd, tasked with building the RM6.3 billion integrated infrastructure project comprising three highways and the 6.5km undersea tunnel. In fact, this project forms the first package of the Penang TMP.

“We have the experience of being project managers, so we know we have the capacity to carry out the Penang TMP. The winning bidder would be responsible for road building and public transport.

“Last month, we gave a 1½-hour briefing to the state and were told to be on standby for further details. We were told that the results will be announced in three to four months,”  Chong told The Edge Financial Daily by telephone.

Asked about WCT’s proposed plans for the Middlebank land swap deal to finance the Penang TMP, he said the bidders were requested by the state to assist the Penang Development Corp (PDC) to carry out an open tender for reclaiming the land.

WCT has no idea of the scope of the development required. However it was informed that it is “welcome” to scout around for state land in Penang to help kick-start the packages in the Penang TMP while waiting for Middlebank’s complete reclamation.

“We believe the reclamation can be completed in five years while state land located on the island and mainland is acquired to kick-start the funding for the [Penang TMP] packages,” he opined.

Meanwhile, Gamuda (fundamental: 2.2; valuation: 1.5) group communications head Josephine Wong confirmed its participation in the RFP for the Penang TMP but refused to divulge details of its briefing to the state government.

According to investor briefing slides posted on its website, Gamuda stated that it was “eyeing” the PDP role in the Penang TMP and that it anticipated the results in mid-2015 (May to July).

IJM Land senior general manager for the northern region Datuk Toh Chin Leong also confirmed the company’s submission as a bidder to become a PDP for the Penang TMP.

IJM Land was recently privatised by IJM Corp (fundamental: 1.1; valuation: 1.2). 

The Penang TMP was jointly prepared by Halcrow Consultants Sdn Bhd, AJC Planning and Singapore Cruise Centre Pte Ltd in 2012 and recommended highway improvements, policy changes and public transport to improve traffic conditions in the state.

The expenditure for the four phases of the Penang TMP involves RM330 million between 2012 and 2015, RM7.13 billion from 2015 to 2020, RM8.9 billion for 2020 to 2025, and RM10.6 billion from 2025 to 2030.

Last July, it was reported that Gamuda, IJM Corp, MMC Corp Bhd (fundamental: 1.0; valuation: 1.8), Scomi Group Bhd (fundamental: 0.55; valuation: 1.2) and WCT were in the running for the Penang TMP PDP job.

This article first appeared in The Edge Financial Daily, on March 31, 2015.