No-go for proposed power supply scheme for Tg Piai petroleum park - Benalec

Banelec Holdings Bhd's Tanjung Piai Maritime Industrial Park project in Johor comprises a man-made island, where a total of 3,487 acres of land would be reclaimed for development.

KUALA LUMPUR: Benalec Holdings Bhd has decided not to go ahead with the power supply infrastructure plan for the 1,410ha Tanjung Piai Integrated Petroleum and Maritime Industrial Park (TPIPMIP) that it had been exploring with Pestech International Bhd’s unit Pestech Sdn Bhd.

This decision comes two months after it and Salcon Engineering Bhd allowed to lapse their memorandum of understanding (Mou) that setting up was aimed at setting up the park’s water supply and sewerage treatment infrastructure.

In a filing with Bursa Malaysia on Friday, the marine construction firm said the MoU with Pestech was allowed to lapse as it was concluded that the Independent Distribution License (IDL) model was not a right choice for the TPIPMIL development.

Under the MoU signed in April last year, Benalec and Pestech agreed to explore various avenues for creating the power supply infrastructure at TPIPMIP.

In its April 13, 2015 announcement, Benalec said its unit would engage Pestech and its nominated consultant (if required) exclusively to apply, design, for the electrical infrastructures to TPIPMIP and subsequently to carry out design, manufacturing, testing, delivery of equipment and installation, construction and commissioning of the proposal on a full turnkey basis via a project contract.

The MoU, initially valid for six months, was extended twice (by six months each).

Benalec said they agreed to study the feasibility for Benalec’s indirect unit Tanjung Piai Maritime Industrial Sdn Bhd (TPMISB) to design, build and operate the infrastructure for power supply at TPIPMIP under the IDL scheme.

“The basis of discussion pertaining to the MoU was intended to comprise the extension of assistance by Pestech to TPMISB in the application of IDL, to undertake full turnkey construction of infrastructure and internal electric power reticulation systems, as well as the maintenance of all installation post construction, among other things,” it noted.

However, the feasibility studies done by TPMISB found that the IDL model was "not preferred" for the development of TPIPMIP.

“Therefore, TPMISB is currently in the midst of exploring other avenues of power supply establishment for TPIPMIP. Pursuant thereto, the parties have no intention of extending the validity of the MoU and the board of directors wishes to announce that the MoU has now lapsed,” Benalec said.

No reason was given for rejecting the model.

Benalec said there was no financial impact and obligation on it.
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