CMS confident of getting job extension

KUALA LUMPUR: Cahya Mata Sarawak Bhd (CMS) is confident of getting an extension for its state road maintenance concessions in Sarawak, which will end in less than two months, according to chief executive officer Datuk Isaac Lugun.

The company maintains 6,260km of state roads, as well as 680km of federal government roads within Sarawak.

“We are confident of getting the extension,” Lugun told reporters on the sidelines of the 8th Bursa Malaysia-Hong Leong Investment Bank Stratum Focus series here yesterday on “Sarawak: Journey in Transformation”.

Lugun said aside from the extension, CMS was eyeing more state road concessions that stretch to about 30,000km.

CMS had already received a one-year contract extension worth RM180mil for the maintenance of Sarawak state roads last year.

Following the extension, analysts said there could be an open tender for Sarawak’s road management and maintenance contracts to reduce cost.

CMS’ construction order book include RM1.36bil of the Pan Borneo Highway package via its joint-venture (JV) unit with Bina Puri Holdings Bhd, and RM466.68mil of coastal road packages, which it received last month with its JV partner China Communications Construction Company Ltd.

On the firm cement business, Lugun clarified that while CMS is the sole cement supplier and manufacturer in Sarawak, the firm is open to other players participating in the market there.

“We are a monopoly currently, but it’s an open market. Anyone can come in and supply cement in Sarawak. But right now, we are the sole cement manufacturer,” he said.

Lugun said that CMS’ cement-manufacturing plant could produce 2.75 million tonnes per year, and currently runs at a 60% capacity rate.

“This would ensure a consistent supply of cement and sufficient capacity to meet the state’s growing demand from increasing construction activities,” he said.

In financial year 2018, about 32% or RM534mil of CMS’ revenue came from its cement business, while construction and road maintenance contributed RM548mil.

He pointed out that moving forward, revenue contribution for CMS would come from its investment in the Sarawak Corridor of Renewable Energy (Score), Sacofa and Kenanga Investment Bank.

At Score, Lugun said CMS had a 25% stake in the OMS ferrosilicon and manganese smelter, as well as a 60% stake in the Malaysian Phosphate Additives’ plant, which is slated to commence operations in the fourth quarter of 2020.

In Sacofa, CMS owns a 50% stake. The company is the sole provider of telecommunications towers in Sarawak. Sacofa has a concession until 2021 to build, manage, lease and maintain towers.

Separately, Regional Corridor Development Authority (Recoda) CEO Datuk Ismawi Ismuni said Score, the biggest economic corridor in Malaysia, has attracted about RM33.6bil in investments to date, mainly from the private sector.

Recoda is an agency that overseas Score’s development.

Ismawi said there were 22 projects by the private sector in Score, of which mainly consist of energy-intensive and heavy industries.

“Moving forward, we will be focusing on getting investment from the downstream sector, which is not power-intensive,” he said.

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