KUMPULAN Darul Ehsan Bhd (KDEB), the investment arm of the Selangor government, has secured contracts worth RM20bil, the bulk of which will eventually be undertaken by its two newly restructured companies.
The two companies, Kumpulan Perangsang Selangor Bhd (KPS) and Kumpulan Hartanah Selangor Bhd (KHSB), are slated to make their debut on the KLSE main board on July 22 in place of SAP Holdings Bhd and Brisdale Holdings Bhd respectively.
KDEB president Datuk Zabir Bajuri told StarBiz in an interview that the two listed vehicles would be the two pillars of the group as it moved ahead. KHSB would essentially lead the group’s property development activities and KPS the infrastructure and utilities business, especially water-related projects.
Among others, the projects include the RM14bil Selangor Maritime Corridor, a 5,600-acre property development in Berjuntai Bestari, a 20% equity interest in the West Coast Highway, a RM2.5bil water treatment project under the Langat Two Water Scheme, RM3.5bil to develop 3,500 acres on Pulau Indah, and the RM2bil BioValley project.
Of the contracts in hand, Zabir said the Selangor Maritime Corridor project was the biggest that the group had secured to date. The project entails the reclamation of an area of about 10km by 250km stretching from Sepang to Sabak Bernam.
“A master plan and feasibility study currently being undertaken are expected to be completed by early September and work is targeted to begin by end-September.
“KDEB is expected to develop the entire area by inviting local and foreign investors and we are in the process of identifying the investors the from Middle East, China and Japan. The project is expected to be undertaken by both KPS and KHSB eventually,” Zabir said.
Another project to be undertaken by KHSB is in Berjuntai Bistari, where it would develop 5,600 acres of land that form part of a new growth centre on a 29,000-acre site in Batang Berjuntai. “We will develop an initial 500 acres into a residential and commercial centre to support the two universities that will be sited there. We estimate our development of the area to cost about RM1.2bil,” Zabir said.
The two universities to be sited there are Universiti Industri Selangor (Unisel) and Universiti Teknologi Jepun.
KDEB has also been given a lead role in the development of the BioValley. Zabir said that of the 1,200 acres, about 412 acres were for the creation of an e-village and media city. This would be developed jointly with the private sector, with KDEB being a 30% partner.
As for the balance 800 acres, 200 have been sold to the Science, Technology and Environment Ministry for the development of various research institutions on the land. The other 600 acres will be developed by KHSB. Excluding the land that has been sold, the development cost for 1,000 acres is estimated at RM2bil.
On the Pulau Indah project, Zabir said it had enormous potential as it was located next to the fast-expanding Westport. In addition, a second bridge is expected to be built to link the island to the KL International Airport while a college will be sited on the island. Central Spectrum Sdn Bhd, a 76.67%-owned subsidiary of KHSB, is undertaking the construction of the project.
The concession agreement for the West Coast Highway linking Banting and Taiping is expected to be signed next month. The project will be placed under KPS, which will also undertake the Langat Two Water Scheme, for which the agreement signing is scheduled for Monday.
Zabir said the contracts in hand would keep the group busy for the next 15 years. Financing would come from internal funds and borrowings. Other local and foreign parties are expected to participate in some of the contracts. KHSB and KPS each has a gearing ratio of about 0.4%.
On Selangor's bid to become a developed state by 2005, ahead of Malaysia's 2020 aspiration, Zabir said the state had continued to attract investments with its strategic location and “the most advanced infrastructure to support the industries.”
”We are all geared towards meeting this target and our business activities are in line with this development,” he said.
Zabir sees a very bright future for the group, especially with the listing of its two units, but declined to disclose any profit estimates.
Last year, KPS reported a net profit of RM50mil, with a growth rate of 30%. This year its net profit is expected to grow by 40%.
KHSB is expected to return to the black in the current financial year with a double-digit net profit.
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