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Tuesday, August 5, 2008

UEM yet to hear from govt on Penang Bridge

PETALING JAYA: UEM Builders Bhd is awaiting word from the government on the developments pertaining to the Second Penang Bridge, said UEM Group chief executive Datuk Ahmad Pardas Senin.

“We are unable to make any comments now. We are still waiting for statements from the government,” he told The Edge Financial Daily.

He was asked to respond to questions on the possibility of the government forming a special purpose vehicle to take over the bridge project and UEM Builder’s contract sum being slashed by RM900 million.

Last Saturday, The Edge weekly reported that the government has formed a special purpose vehicle, Jambatan Kedua Pulau Pinang Sdn Bhd (JKPP) to undertake the project as UEM Builders and China Harbour Engineering Co (CHEC) — the two main contractors for the job — have so far failed to firm up their shareholders agreement.

It was reported that JKPP had also awarded CHEC a contract of about RM2.3 billion and UEM Builder another contract worth RM1.3 billion.

Affin Investment Research said if the news was true, it would have negative impact on UEM Builders, especially when the project comes with a materials costs fluctuation clause to protect UEM Builders’ construction margin.

“On a broader perspective, the loss of contracts to well-connected companies, if true, might cast more negative light on GLCs (government-linked companies),” it added.

Meanwhile, Regina William reports that the state government was in the dark over the latest developments for the Second Penang Bridge project.

“We are not aware of what is happening and what we know is through the report,” said Chief Minister Lim Guan Eng. “Since this is federal government project, it is up to the federal government to decide on the mechanism. But if there is a request, we will assist in coordinating and cooperating with the relevant agencies to speed up whatever needs to be implemented.”

By The EDGE Malaysia

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