By A. Stephanie
A total of RM10.2 billion in contract value was carved-out from mega projects such as the Mass Rapid Transit (MRT) project and reserved for bumiputera companies last year, according to the Economic Transformation Programme (ETP) 2014 annual report released today.
The report said this brought the total contract value carved-out for bumiputera companies to RM23.5 billion since 2012, via the Carve-out and Compete initiative by the government’s Bumiputera Agenda Steering Unit (Teraju).
6 new mega projects
The Performance Management and Delivery Unit (Pemandu), a unit under the Prime Minister’s Department, released the report yesterday. Pemandu noted: “The contracts are awarded based on merit and support the entry of bumiputera into large projects like the MRT.
“Six new mega projects worth RM10.2 billion were identified last year, comprising Emkay Group Bhd for RM2 billion, Malaysian Rubber Board (MRB)’s Centre of Excellence Five Facilities in Sg Buloh at RM390 million, the Mara Asia Aerospace City worth RM630 million, the West Coast Expressway for RM1.5 billion, Damansara-Shah Alam Expressway (Dash) for RM2.5 billion, and the Sungai Besi-Ulu Kelang Elevated Expressway (Suke) for RM3.2 billion,” the unit stated.
The report said: “Some 47% or RM9.1 billion worth of contracts were carved-out of the MRT project and distributed to 350 bumiputera contractors, which allowed greater participation of bumiputera contractors ranging from Class A to Class F.”
In conjunction with this, the Centre of Excellence for Mega Projects programme, introduced in collaboration with the Construction Industry Development Board to train selected engineering graduates and professionals in fields such as tunnelling, column-less building and superstructures, has enrolled 120 students.
More bumiputera listings, divestments
Starting from 2014, Teraju worked closely with government-linked private equity firm Ekuiti Nasional Bhd (Ekuinas) to expedite new bumiputera listings on Bursa Malaysia as part of the Skim Jejak Jaya Bumiputera (SJJB) programme.
Ekuinas focused on the selection of potential companies for listing, while Teraju monitored the progress of the companies.
As of December 2014, the market capitalisation of the total of 10 SJJB companies reached RM4.14 billion. Another company, EA Technique Bhd listed in December 2014 and now has a market capitalisation of RM388 million on top of that.
Meanwhile, asset disposals by government-linked investment companies (GLICs) and government-linked companies’ (GLCs) assets led to RM164.4 million and five bumiputera companies being divested from sovereign wealth fund Khazanah Nasional Bhd and asset manager Permodalan Nasional Bhd (PNB).
As of November 2014, the government has divested 32 companies out of the 33 firms targeted in the year.
The report noted: “MOF (Minister of Finance) Inc divested three companies: Jaring Comms Sdn Bhd, aviation component manufacturing firm Composites Technology Research Malaysia Sdn Bhd and Penang Port Sdn Bhd, while ministry-level rationalisation saw the Works Ministry wind up Steel Frame & Truss Technology Sdn Bhd and CIDB Events Management Sdn Bhd.
“During the year, Ekuinas divested all its holdings in Konsortium Logistik Bhd and unlocked values from offshore supply vessel operator Icon Offshore Bhd through an initial public offering in June,” it noted.
Last week, Icon Offshore’s CEO Jamal Yusof and, his brother, COO Rahman Yusof were remanded by the Malaysian Anti-Corruption Commission to facilitate investigations and released on bail soon after. Ekuinas retains a 42% in Icon Offshore whose initial public offering last year raised RM945 million.
“All in all, GLICs and GLCs have institutionalised divestment of non-strategic assets as part of their plans moving forward,” the ETP report said.
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