Encorp Bhd, already armed with the expertise to build teachers' quarters, is eyeing more construction management projects in both the government and the private sectors.
We are on the lookout to venture into projects that we can add value to, such as building living quarters for the uniformed government personnel, including the police and army, as well as low-cost housing schemes for developers, Encorp group chief executive officer Yeoh Soo Ann said.
Encorp subsidiary Encorp Systembilt Sdn Bhd is the concessionaire of the privatised residential project by the Education Ministry to build 10,000 units of apartment for teachers nationwide under a build-transfer concept.
The project to design, finance and build the four- and five-storey walk-up apartments was awarded to Encorp Systembilt five years ago and involves 109 sites nationwide.
Based on a deferred payment scheme with an annual compounded interest of about 10%, the concession would result in a turnover of over RM4bil for Encorp.
Currently, the group's earnings are mainly derived from concession payments from the construction of the teachers' apartments.
Yeoh said the contract guaranteed Encorp a stable earnings stream of RM35mil in annual post-tax profit over the next 26 years.
Construction of the teachers' quarters is about 99.6% completed with only about 40 units left. All the units are expected to be completed by the end of the year and would be handed to the government by the first quarter next year.
Design of the teachers' housing differs from the conventional government quarters, with attention to details and aesthetics. The apartments, of about 1,000 sq ft, are fully furnished and come complete with a playground and landscaped garden.
We have built a strong team and a good track record in construction management from the teachers' housing project. The expertise gained will put us in good stead to venture into other similar construction and new property development projects, Yeoh said.
In its building process, property construction subsidiary Encorp Construct Sdn Bhd has adopted a new pre-cast building system which is efficient, less labour intensive, and time saving to ensure reliability and consistency in finishes.
The total project cost amounts to RM1.38bil. In 2000, the company secured an 18-year Islamic bond of RM1.1bil to finance the cost of the project.
It is quite a monumental task as we have to work closely with the Education Ministry and 46 local authorities in 109 locations where the teachers' quarters are located. So far, we have obtained 3,200 approvals from the authorities within a tight project time frame of 18 to 24 months. To date, a total 45 million man-hours have been spent on the project, he said.
Yeoh said that under the 8th Malaysia Plan, the government had wanted to build 80,000 teachers' quarters but the economic slowdown had affected the project.
We understand there are plans to build more teachers' housing in view of the shortage, especially in rural areas. We will tender for these schemes when the government announces them, he added.