Ekovest-MRCB eyeing transforming KL rivers to those like in London and Paris

EKOVEST Bhd
is expected to be the prime beneficiary of the RM2.2bil River of Life
(RoL) project, given that the company has a 60% stake in the
joint-venture company with Malaysian Resources Corp Bhd (MRCB) which was recently appointed the project delivery partner (PDP) by the Government.
StarBiz understands
that the Ekovest-MRCB JV is also eyeing the RM1bil works for the
beautification works portion of the RoL project and could potentially
secure a bigger role of cleaning up the 10.7km stretch of the river over
a period of three years. The RM2.2bil figure includes the total
estimated cost of land development and sales adjoining the 10.7km
stretch.
Reports also indicate that the Ekovest-MRCB JV could
also, eventually, bid for the entire cleaning, rehabilitating and
beautifying works for the project when the authorities open it up for
tenders as the latter would want to get the contractors who will deliver
the job at the lowest possible cost.
The Ekovest-MRCB JV has
indicated and expressed interest in the river beautification works and
negotiations with the Government have so far been encouraging, according
to Ekovest's 2011 annual report.
Ambitious plan:
The objective of River of Live project is to transform the Klang and
Gombak rivers into cleaner ones like those in Amsterdam, London and
Paris.
As the PDP, the Ekovest-MRCB JV will earn a
maximum fee of RM22mil, which is equivalent to 1% of the total projected
works to be delivered over the three-year period. It will also get
monetary incentives with respect to the river rehabilitation and
beautification works.
Should the JV secure the beautification
works of the project at RM1bil, Ekovest could be raking in an additional
RM600mil in total sales given its 60% stake in the JV, while MRCB would
get RM400mil over the three year period.
Sources also say that
the Government could also allow the joint-venture company to handle the
beautification works of the entire stretch of the Klang and Gombak
rivers should they perform a satisfactory job as per their scope
outlined in the agreement.
According to the Government's RoL
portal, the river cleaning job will entail works involving a total of 26
government agencies and departments across four ministries. The
ultimate objective of this RoL is to eventually clean up the entire
stretch of the 110km Klang and Gombak rivers to transform it to be on
par with rivers in other developed countries such as in Amsterdam,
London and Paris by the year 2020.
Ekovest, the company which is
aiming to carry out such an ambitious task of cleaning up the polluted
waters is a construction company. Calls and text messages to its chairman Datuk Lim Kang Hoo went unanswered.
Lim who has a 26% interest in Ekovest is also Knusford Bhd's executive director and PLS Plantations Bhd's non-executive director.
Ekovest
had been involved with Johor-based projects specifically in the
Iskandar region and their recently completed projects which had been
realised in its financial year ended June 30, 2011 include Universiti
Malaysia Sabah Phase 2B, two contracts for Universiti Tun Hussein Onn Malaysia and other projects at Danga Bay, Johor.
Meanwhile, in an interview with StarBiz, MRCB
did not want to specifically comment on the chances of it winning the
tender. It said Ekovest, MRCB and the subsidiaries and associates of
both companies were not permitted to tender, bid and apply for any other
river cleaning projects or government land along the river as long as
the JV remained the PDP of the RoL project.
StarBiz also
learns that should the JV company eventually secure the tender for this
job to include the cleaning works, it would need to coordinate very
closely with the government agencies and departments across four
ministries. If they win the job, MRCB would actively assist in the
facilitation with these government agencies while Ekovest will need to
spearhead the JV by also supplying technical expertise for the job.
One
question raised by an industry observer was what role will Ekovest play
specifically in this RoL project, given that it is a majority
stakeholder of the JV. If Ekovest is expected to spearhead the JV, how
will the company carry out the task and can it utilise current expertise
given the nature of this job or will it need to employ more technical
experts?
It is interesting to note that YTL Corp Bhd's Wessex Water Ltd,
which had earlier expressed interest in a similar project to clean up
the Selangor portion of the Klang River, later withdrew their interest,
according to earlier reports on this matter quoting sources. StarBiz learns
that their withdrawal is likely due to the hefty costs involved in
cleaning up the river and the huge coordination work required.
“Technical
expertise is not a problem for YTL's Wessex Water given their years of
experience in dealing with this sort of water- related matters. It is
the hefty cost and the viability of such a huge project plus a lot of
red tape and bureaucracies surrounding the state and the federal
governments which should be the focus. This is the reason why Wessex did
not want to be involved with this project,” a source said.
Nevertheless,
at RM2.2bil for a 10.7km stretch of the Klang and Gombak rivers, the
cost of cleaning and beautifying a kilometer of the river is arrived at
RM205.61mil. The companies involved in this project would definitely
stand to gain not only financially but the technical experience gained
would definitely bring it into prominence, should the RoL project
succeed as planned