KUALA LUMPUR: The government has scrapped plans for a proposed extension of the New Pantai Elevated Highway but IJM Corp Bhd has vowed to appeal the decision.

IJM Corp said yesterday that the government, via the Public Private Partnership Unit (Ukas), has informed its indirect wholly-owned subsidiary New Pantai Expressway Sdn Bhd (NPE) that the government would not proceed with the extension. “NPE intends to appeal for a reconsideration of the proposal with a revised alignment,” IJM said in a filing with Bursa Malaysia yesterday.

IJM’s announcement did not state the government’s reason for deciding against the proposed extension. This comes more than a year after IJM first announced that NPE had on April 1, 2011 received an approval-in-principle from the government for the proposed extension to the elevated highway from Ampang to Kuala Lumpur.

The project would be privatised by way of a supplemental agreement to the concession agreement dated March 26, 1996, IJM said in an earlier filing. However, the deal was subject to further negotiations between IJM and the government on the project’s technical and financial details.

The proposed extension was estimated to be worth about RM1 billion, according to earlier reports. IJM had initially expected to conclude negotiations within six months but no announcement had been forthcoming until yesterday’s filing. IJM yesterday fell four sen to RM5.11 with 1.91 million shares traded.

This article appeared in The Edge Financial Daily on June 28, 2012.