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Tuesday, June 24, 2008

Gamuda and WCT eye RM1b job

DOHA: Local construction firms Gamuda Bhd and WCT Engineering Bhd, which have a strong partnership in the Middle East, are confident that they will be able to jointly secure a new highway project worth at least RM1bil in Qatar this year.

Company officials based in the Gulf state said the tender for phase two of the Dukhan highway was expected to open as early as next month, as the first phase of the project nears completion.

“We believe we are in a good position to get the contract as this is actually an extension to the current highway project that we are doing, which is almost 90% completed,'' general manager for the Dukhan highway project S.D. Boon told visiting Malaysian reporters in Doha last week.

He said the Gamuda-WCT joint venture (JV) was already pre-qualified for the tender, and was likely to be called in to submit its bid soon.

The JV is the contractor for the 43km four-lane dual carriageway linking the industrial area in Dukhan to Shahaniya. The contract was awarded in July 2005 for 750 million Qatar riyals or RM784mil at the time.

Boon said the second phase of the highway would probably cost more to construct, partly due to higher material cost.

Gamuda has a 51% stake in the JV, while WCT owns 49%.

Shahaniya is located midway between Dukhan on the west coast and the capital city Doha on the east coast of the peninsula.

Qatar's public works authority is planning to upgrade the road link between the country's thriving financial centre in Doha and the fast growing oil and gas industrial area in Dukhan.

Apart from the Dukhan highway, Gamuda and WCT are partners in a consortium led by China’s Sinohydro Corp Ltd for engineering works being done at the New Doha International Airport (NDIA).

The completion date for the NDIA contract has been pushed back to 2010 to make way for additional works that had bumped up the original contract value awarded to the consortium from RM1.8bil to RM2.8bil currently.

Individually, the two companies are also involved in several infrastructure development projects in the region. Both had excellent track records there, analysts said.

A new job secured in the Middle East – where margins are typically higher compared with local projects – would help shore up sentiment on Gamuda and WCT.

Shares in Gamuda fell 6 sen yesterday to RM2.13 – its lowest level since November 2006. Meanwhile, WCT's share price hit a one-year low of RM2.89 last Friday. The stock was down 2 sen at RM2.95 yesterday.

By The Star (by Izwan Idris)

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