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Tuesday, June 10, 2008

Second Penang bridge on track, cost may rise

UEM BUILDERS Bhd, a contractor for the second Penang bridge, said the project is on track for completion in 2011 and that the government has agreed in principle on a price increase as the cost of raw materials surges.

"The project value is at RM4.3 billion now. There will be a mechanism to take into consideration price rise and a formula will be worked out," managing director Datuk Ridza Abdoh Salleh said after a shareholder meeting in Kuala Lumpur yesterday.

In general, he said, contractors should be allowed to raise project costs as the recent sharp jump in building material prices was far beyond any contractor's projection.

While the government said that it may stop certain mega projects in favour of more people-centric programmes, Ridza is positive that the project to build a second link from the mainland to Penang island will continue.

"If you read further on the Second Finance Minister's statement, he said that the Penang bridge may not be affected. We'd like to look at this positively," Ridza said.

He said the company has committed over RM200 million on the project and have spent RM50 million so far.

"As far as we are concerned, the preliminary work is going on. Some 70 per cent to 80 per cent of the land has been cleared and we have also done the advanced soil investigation," he said.

UEM Builders' current order book stands at RM4.8 billion, 35 per cent of which is from overseas. Chairman Datuk Abdul Rahim Abu Bakar said it is aiming for a balanced earnings mix to cut reliance on domestic projects.

He said the company hopes to increase its activities in India and the Middle East while it pursues new construction and infrastructure projects in Singapore, Indonesia and Papua New Guinea.

By New Straits Times (by Chong Pooi Koon)

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