Spotlight on China investments after failed Bandar M’sia deal

  • Business
  • Friday, 05 May 2017

PETALING JAYA: The fall through of the Bandar Malaysia deal involving Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corp (M) Sdn Bhd (CREC), the local unit of Beijing-based China Railway Group Ltd, has put the spotlight on other China investments in the country.

Chinese construction firms have in recent years won contracts in Malaysia either directly or through joint ventures with local firms.

The Chinese presence has been most apparent in the construction/property space, but with an emphasis on large infrastructure projects.

These initiatives were largely driven through government-to-government agreements.

AllianceDBS Research, quoting statistics by the Construction Industry Development Board, noted that Chinese contractors had led the way in 2015, clinching RM8bil worth of projects out of the RM19bil total construction project value awarded to foreign contractors in that year.

The research firm noted that the RM8bil worth of projects were spread across 25 projects.

According to the research firm, “the edge Chinese contractors have over other foreign contractors as well as local ones is access to funding, cheaper labour, access to materials and fast turnaround construction periods.”

The two most recent projects awarded to Chinese parties in the infrastructure space were rail-based – the Gemas-Johor Baru double-tracking comprising China Railway Construction Corp Ltd (CRCC), CREC and China Communications Construction Corp (CCCC), and the East Coast Rail Link.

The other major projects include the Malacca Gateway, the Trans-Sabah Gas Pipeline and the Wuxi Suntech Power Co Ltd manufacturing project in the Malaysia-China Kuantan Industrial Park.

Elsewhere, CCCC and joint-venture partner George Kent (M) Bhd had clinched a package for the MRT Line 2 last August.

In the property space, China’s Country Garden Holdings Co Ltd has embarked on an ambitious multi-billion-ringgit project in the form of the massive Forest City project in Johor.

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