KUALA LUMPUR: IJM Corp Bhd’s 60%-owned unit Kuantan Port Consortium Sdn Bhd (KPC) has been granted an extension on its concession to operate Kuantan Port, together with the development and operation of a new deep-water terminal (NDWT) adjacent to it.

In a filing with Bursa Malaysia yesterday, IJM said KPC has executed a new privatisation agreement with the government and Kuantan Port Authority for the concession, which will commence from June 1.

It said a further 30-year extension will be granted upon the fulfilment of the Phase 2 development of the NDWT by Dec 31, 2039.

This new concession replaces a previous agreement dated Nov 22, 1997 — which would have expired on Dec 31, 2027 — for which both parties executed a termination agreement to end.

The NWDT will be developed by KPC in two phases, with a total investment of about RM3 billion. The development will be funded through borrowings and internal funds.

The project will involve the dredging of the harbour basin and navigational channel, reclamation works, construction of new berths and cargo storage yards, and provision of infrastructure facilities and utilities associated with port operations.

In a separate statement, IJM said the NDWT, which will be able to cater to bulk carriers and container vessels up to 150,000 tonnes, is expected to commence operation in 2017.

It said Kuantan Port, currently operating at near full capacity with 23 million tonnes achieved in 2016, will see its volume more than doubling to 52 million tonnes per year once the NDWT is fully completed.

It added that the government is investing RM1 billion to build a new 4.63km breakwater at the port, which is under construction, and to upgrade external infrastructure to support the port’s expansion.

IJM shares closed unchanged yesterday at RM7, bringing its market capitalisation to RM12.5 billion.

This article first appeared in The Edge Financial Daily, on June 17, 2015.