Posted on November 2, 2015
Lifestyle property developer Eastern & Oriental Bhd (E&O) has awarded RM2.32 billion worth of land reclamation works to Chinese contractor China Communications Construction Co Ltd (CCCC) for the proposed Seri Tanjung Pinang Phase 2 (STP2) project in Penang.
In a filing with Bursa Malaysia today, E&O said its subsidiary Tanjung Pinang Development Sdn Bhd has issued a letter of award (LOA) to CCCC’s Malaysian unit China Communications Construction Co (M) Sdn Bhd (CCCC (M)) to undertake the proposed project.
The LOA serves primarily as an acceptance of the tender to reclaim Phase 2A of STP2, an area measuring 384 acres which includes the 131-acre Gurney Drive foreshore (Package 1), for a contract sum of RM1.035 billion.
“The prescribed period to complete reclamation works under Package 1 shall be approximately 30 months from the formal acceptance of the LOA by CCCC (M),” said E&O.
The LOA also includes the conditional award for the proposed land reclamation works for the remainder of STP2, made up of Phase 2B and Phase 2C covering an area of 507 acres (Package 2).
E&O said the contract sum for Package 2 is RM1.285 billion subject to adjustments arising from fluctuations in exchange rate and the price of fuel, and changes in cost if applicable.
“The award of Package 2 shall be strictly conditional upon the approvals of the board of directors of Tanjung Pinang Development and E&O and of the relevant regulatory authority on the scheduling of works,” said E&O.
With the latest award, physical works on STP2 will commence in the “near future”, it added.
In a separate statement today, E&O group managing director Datuk Seri Terry Tham Ka Hon said efforts to secure financiers for the project are being pursued concurrently and will be finalised soon.
“With the reclamation contractor identified and financing arrangements soon-to-be firmed up, we look forward to operationalising STP2 and bringing the project to fruition with mobilisation and commencement of works targeted by the year end,” he said.
He added that the group went through a rigorous tender process that included the prequalification of potential contractors prior to the tender submission to select the reclamation contractor.
“We believe that in terms of technical competency, track record, local project experience as well as contract competitiveness, the shortlist of reputable international firms has led us to finalise the award to CCCC (M),” said Tham.
CCCC is listed on the Shanghai Stock Exchange and the Main Board of the Hong Kong Stock Exchange. It is the largest infrastructure construction and dredging company in China and the world’s largest dredging company in terms of both total capacity of trailing suction hopper dredgers and total cutter section dredgers, the key machinery in the reclamation dredging process.
In Malaysia, CCCC’s previous project was the design and construction of the 24km Penang Second Bridge.
E&O shares closed unchanged at RM1.56 today, bringing a market capitalisation of RM1.95 billion, while CCCC’s stock ended the day down 1.28% or 14 cent to HK$10.80 on the Hong Kong Stock Exchange, with a market capitalistion of HK$254.31 billion.