KUALA LUMPUR: Muhibbah Engineering (M) Bhd, in a consortium with Bombay-listed VA Tech Wabag Ltd, has won a RM949.6 million contract from Petroliam Nasional Bhd (Petronas) to build an effluent treatment plant for the refinery and petrochemical integrated development (Rapid) project in Pengerang, Johor.

In a filing with Bursa Malaysia yesterday, Muhibbah said the consortium was awarded the contract for the design competition for the re-feed and engineering, procurement, construction and commissioning of the effluent treatment plant.

The contract was awarded by PRPC Utilities and Facilities Sdn Bhd, a wholly-owned subsidiary of Petronas Refinery and Petrochemical Corp Sdn Bhd, which in turn is a wholly-owned unit by Petronas.

Muhibbah said the purpose of the integrated effluent treatment plant is to reduce the pollution in the aqueous effluents of the Rapid complex to below the regulatory discharge limits.

The contract is scheduled to commence in the third quarter of this year and is expected to be completed by end-2018.

Muhibbah said the contract is expected to contribute positively to the earnings and net assets of the group moving forward. However, the group did not disclose the share of profit agreed upon in the said contract between Muhibbah and Wabah.

On Wednesday, Wabag filed a statement to the Bombay Stock Exchange with regard to the winning of the contract. Following the news, Wabag’s share price jumped 6.36% to an intraday high of 727.15 rupees (RM46) before paring its gains to settle at 712 rupees yesterday.

Muhibbah’s (fundamental: 1.1; valuation: 0.8) share price gained eight sen or 4.55% to close at RM1.84 yesterday, valuing the group at RM824.62 million.

This article first appeared in digitaledge Daily, on September 4, 2015.