KUALA LUMPUR (Dec 28): Pestech International Bhd has secured the Kuala Lumpur International Airport (KLIA) Aerotrain project for RM742.95 million, which involves the upgrade of the 1.2km automated people mover (APM) system at the airport, together with the Aerotrain's operations and maintenance, for a 10-year period.
The Edge weekly reported in July that Pestech together with rolling stock manufacturer Bombardier Transportation were the front runners for the project, which was first called for tender in August 2020.
In a filing on Dec 27, Pestech said its wholly-owned unit Pestech Technology Sdn Bhd accepted the letter of award from Malaysia Airports (Sepang) Sdn Bhd, a unit of Malaysia Airports Holdings Bhd (MAHB), for the design, supply, installation, testing and commissioning for the APM and associated works.
Pestech will however be responsible for the financing of the project, at an estimated RM300 million to RM350 million in its three years of development, and payment from MAHB will only come in on a staggered basis across six years from the fourth year onwards in 2025.
Speaking to The Edge in an exclusive interview, Pestech managing director and group chief executive officer (CEO) Paul Lim Pay Chuan said the company will come in as the EPCC (engineering, procurement, construction and commissioning) contractor, with Bombardier as a subcontractor and technology partner.
The Aerotrain will be developed from March 14, 2022, involving the upgrading from the current Bombardier's Innovia APM 100 rolling stock to the Innovia APM 300, Lim said.
Upon completion, Pestech will also be responsible for the operations and maintenance (O&M) of the Aerotrain from March 13, 2025 until Feb 11, 2034.
"We see this as an opportunity for the group to move into a new segment of not just undertaking rail electrification, but also full-fledged services including rolling stocks, train control systems," Lim said.
"The O&M portion gives us an opportunity to really learn to operate the train in order for us to offer value-added services to clients in the region in the future," he added.
It is high time to replace or upgrade the aged KLIA Aerotrain system, which was commissioned in 1998 and has increasingly suffered breakdowns over the years, having shuttled more than 300 million passengers in its 23 years of service.
In a statement on the contract award, MAHB managing director Datuk Iskandar Mizal Mahmood said Aerotrains are approaching their end-of-life stage and need to be upgraded so that passengers can be better served.
"The new Aerotrains will be upgraded together with the track system infrastructure, and this will also provide the airport with better operational efficiency.
"No doubt there will be some inconvenience to passengers in the next three years during the upgrade period. While we will endeavour to minimise the disruption of service, passengers will continue to be shuttled using the airside bus service which has been running well as an alternative service since 2017," Iskandar added.
MAHB said the tender was preceded by three feasibility studies to determine the requirements, and a series of stakeholder engagements with the Transport Ministry, regulators and government agencies.
The airport operator appointed US-based consultancy firm Jacobs Engineering Group to provide project management consultancy services from the development of detailed design stages to the project completion, using the design-build-finance-operate-maintain (DBFOM) approach.
"In Malaysia, Jacobs has been involved in almost all of the major rail and transit projects including the Ampang Line, Kelana Jaya Line, Putrajaya Line, and most recently the JB-Singapore RTS Link," MAHB added.
In the meantime, Pestech will have to raise the necessary funding needed to execute the project's development in the three years from 2022 to 2024, which Lim said will be done through both equity and debt.
As at end-September, Pestech had short- and long-term borrowings of RM479.24 million and RM795.34 million respectively, against cash and fixed deposits of RM138.95 million. Net gearing stood at 1.44 times.
According to its annual report, the group's core activities are power distribution and smart grid; high-voltage and extra high-voltage electrical system; rail electrification and signalling; power generation, transmission line and power cables; and infrastructure asset management.
Ongoing rail-related projects include the Gemas-JB double track rail electrification, and similarly the rail electrification for the MRT Putrajaya Line (MRT2).
The company has been consistently profit-making since its listing in 2012. For the financial year ended June 30, 2021 (FY21), net profit rose 29% year-on-year to RM66.38 million or 8.72 sen per share, from RM51.45 million or 6.73 sen per share. Full-year revenue rose 11.49% to RM889.36 million, from RM797.68 million.
Executive chairman Lim Ah Hock holds a 33.47% stake in Pestech, while his nephew Paul Lim, the company's managing director and group CEO, owns a 19.76% stake.
Shares of Pestech settled up two sen or 2.58% at 79.5 sen per share on Monday, giving it a market capitalisation of RM754.65 million.