By G. Sharmila
Two major power plant projects, namely Track 4A and 4B, will be awarded via open tender, according to Energy Commission chairman Abdul Razak Abdul Majid.
He told the Business Times last Friday that recipients of the two projects, with a combined capacity of 2,000 megawatts, would not get the jobs through direct negotiations.
“As of now it is still (via) open bidding,” the paper quoted Abdul Razak saying, which dismisses claims from The Edge Financial Daily last week that Track 4A will be awarded via direct negotiations (more here).
According to the Business Times, Abdul Razak refuted the claim, saying that the commission has not received any directive from the authorities to engage in direct talks with potential suitors.
The paper also said that the proposal for Track 4A is likely to be called in the second quarter of the year and will likely be offered as a brownfield project at the sites of existing power plants.
It said that the construction of the power plants, expected to cost a combined RM8 billion to RM10 billion, will begin by the middle of next year.
Meanwhile, CIMB Research said in a note today that it believes that YTL Power International Bhd is the likely winner for Track 4A.
“Our belief stems from the fact that YTL Power remains one of the most capable to build and operate the gas fired power plant given its previous experience. Furthermore, YTL Power’s Power Seraya in Singapore also gives it an advantage as it has experience in an LNG and non-subsidised fuel market, which the Malaysian power and utilities sector are gradually shifting to.
Given both factors, combined with the government’s acceleration plans, we strongly believe that YTL Power was the one that was awarded the Track 4A.”
The research house is maintaining an Add call on YTL Power with the catalyst being it winning Track 4A, assuming the rumours of a directly negotiated agreement is true.
“If YTL Power does lose out on Track 4A, we believe there is still Track 4B, which could be another 1,000MW (megawatt) gas fired power plant that would be up for tender. Assuming that doesn’t come through as well, we believe privatisation by its parent company, YTL Corp, could be on the cards”, the research house said.
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