Siemens-Alstom merger seen to impact Malaysia

PETALING JAYA: Talk of a possible merger between Siemens AG and Alstom SA have made international headlines and industry observers say a merged entity could have some impact on the Malaysian landscape.

This is because both companies are major players in the Malaysian energy and transport infrastructure sectors.

“A merger would most likely entail a review of contractual terms of plants being built or to be built as these companies have different pricing, performance and risk mitigation limits,” opined an industry expert.

However, an analyst covering the energy sector believed that the impact would be minimal.

“Customers would not have to review any contracts already signed as (both) the companies will have to comply with agreements they have signed with their clients,” he said.

Another industry observer said an Alstom-Siemens team would become a powerhouse in the local scene but in the transport infrastructure sector, however, they have more players to compete with.

“If merged, I believe both can leverage off each other’s strength in both sectors.”

As it is, both companies are involved in myriad power plant and transport projects in Malaysia.

In a brief reply to StarBiz, Alstom Malaysia said “a significant portion of the power and grid installed base in Malaysia were supplied or built by Alstom”.

Among Alstom’s ongoing power plant projects in Malaysia are Tenaga Nasional Bhd’s (TNB) Janamanjung 1,000MW coal-fired plant extension and Hulu Terengganu 2 x 125 MW Electro Mechanical Package as well as the Tanjung Bin Energy Insurers’ 1000MW coal-fired plant (as consortium leader).

Alstom has also provided key rail transport equipment and services to Keretapi Tanah Melayu Bhd and Rapid KL’s Light Rail Transit Star and Putra lines.

Siemens Malaysia has supplied high-efficiency gas turbines to the new TNB 1,000-MW Prai combined cycle gas turbine power plant, as well as secured a contract from TNB for the delivery of one SGT5-4000F single-shaft gas turbine for the Connaught Bridge 350-MW Power Station.

Siemens has also supplied Kuala Lumpur’s Mass Rapid Transit Corp 58 Inspiro trains and has been commissioned to construct two maintenance depots.

Two days ago, Siemens AG offered its French rival Alstom SA to swap the former’s transport assets with Alstom’s energy assets. Siemens AG is trying to beat General Electric Co’s offer to buy Alstom SA for over US$13bil.