Malaysia and China are discussing the possibility of port expansion plans according to the Transport Minister of Malaysia. The government had identified Port Klang as its focus for expansion, given its status as the primary port of the country. The port had two operators, Westports Holdings Bhd and Northport (M) Bhd
The government has talked about expanding Port Klang for some time. It recently gave Westport the green light to expand.
The previous Barisan Nasional administration had initially planned a third port on nearby Carey Island, as part of an USD 34 billion industrial hub project. In July 2018, the new Pakatan Harapan administration said that it would carry out a feasibility study on the proposed Carey Island port project
(Source: Malaysia Kini; Malay Mail)
While the construction industry is experiencing weaker sentiments in Peninsular Malaysia, the sector is booming in East Malaysia particularly in Sarawak. In its latest budget the largest state in Malaysia announced an allocation of MYR 9.1 billion (USD 2.23 billion) for infrastructure development. Notable projects to benefit from the allocation include Sarawak Coastal Road, Second Link Road and the State Water Grid project. The overall cost of the first two projects is MYR 6 billion (USD 1.47 billion), while the water grid project will cost MYR 2.8 billion (USD 0.69 billion). An allocation of MYR 2.3 billion (USD 0.56 billion) was also set aside for electricity supply expansion to rural areas, which as of end 2017 stands at 95% coverage rate.
Sarawak’s Chief Minister Abang Johari Abang Openg informed that investors notably from China and South Korea are coming in to take part in the state’s industrialization programs particularly at the Samalaju Industrial Park in Bintulu and the Samajaya High-Tech Park in Kuching. He was also confident that the increase in infrastructure budget allocation would help to stimulate the growth of the state’s economy to 5% compared to 4.6% last year. At the same time, the Sarawak Corridor of Renewable Energy (SCORE) development area has recorded around MYR 80 billion (USD 19.57 billion) worth of investment from public and private sectors. SCORE is expected to generate MYR 334 billion (USD 81.71 billion) worth of investments, and once fully realized in 2030, would generate 1.6 million jobs for the young locals.
Financers advised construction players to turn to East Malaysia, as opportunities are larger in the construction sector in the area, with tenders expected to roll out starting from the first quarter of 2019. Among prominent beneficiaries for the booming construction sector in Sarawak include Cahya Mata Sarawak Bhd (CMS) which is the main building materials supplier in the state, Hock Seng Lee Bhd (HSL) which has good reputation in wastewater management and sewerage projects, as well as a fleet of tunnel boring machines (TBMs) at its disposal, and KKB Engineering Berhad (KKB) which is one of the key water pipe manufacturers in Sarawak.
(Sources: Malay Mail; The Borneo Post; The Edge Markets)
A comprehensive development plan (CDP) for Malaysia Vision Valley 2.0 (MVV 2.0) was launched by the Chief Minister of the state of Negeri Sembilan on 13 December, 2018. MVV 2.0 is a state-led private sector-driven development that spans across 153,411 ha in Seremban and Port Dickson, the largest towns in the state.
The CDP defines the growth development plan for MVV 2.0, aims to bring in international and local investors, creating job and business opportunities. As the master developer of MVV 2.0, Sime Darby is planning for the development of a high-tech and industrial park, which is among six projects identified under the first phase.
Sime Darby Property currently owns 2,838 acres within MVV 2.0 and has the option to acquire another 8,796 acres from Sime Darby Bhd, its parent company, within five years from the date of the public listing of the former. The first phase of MVV 2.0 spans over a 30-year development period covering 27,000 acres.
A Memorandum of Agreement (MoA) was signed between the state government, through MVV Secretariat (MVVS) and MVV Holdings Sdn. Bhd. (MVVHSB), a subsidiary of Sime Darby Property in relation to the preliminary development stages of MVV 2.0. Also, a Memorandum of Understanding (MoU) was signed between the Malaysia Green Technology Corporation and the state government via MVVS. Based on the MoU, the parties will collaborate in the implementation in delivering green concepts and green technology enablers for the MVV 2.0 project.
(Sources : The Edge Markets; The Sun Daily; Sime Darby Property)
The consortium of MRCB – George Kent Sdn Bhd will continue to work on the Light Rail Transit Line 3 (LRT 3) from Bandar Utama to Johan Setia, following the revised sum of its price tag as indicated in the newly received Letter of Appointment (LoA) for the fixed price contract for the work. The LRT3 project is one of the infrastructure projects reviewed by the Malaysian government following concerns on high price tags, in a series of infrastructure projects assessment since the formation of new government in the aftermath of May 2018 election, which saw several mega scale projects being scrapped, delayed or renegotiated.
The LoA dated 2 November 2018 from Prasarana Malaysia Berhad, the owner of LRT3, contains terms which include the deadline for the project to be completed, which is 28 February 2024, unless extended in accordance with the Contract, and the Contract Sum of the Project which is fixed at MYR 11.856 billion (USD 2.83 billion) inclusive of a contingency/provisional sum of MYR 400 million (USD 95.4 million). Both MRCB and George Kent are also expected to provide a proportionate corporate guarantee to Prasarana.
The negotiations on the fixed price contract shall continue with the contract itself will be executed no later than 12 December 2018. Both MRCB and George Kent indicated that the project would not affect their earnings and net assets for the current financial year, but will positively attribute to their future earnings.
(Sources: The Star; Bursa Malaysia)
The Malaysian government is encouraging the private sector to invest in airport development and expansion throughout the country. Currently, more than 75% of airports in Malaysia are not commercially viable and are managed on a cross-subsidisation model to provide the Malaysian people with the required connectivity among its smaller towns and rural outposts.
The government is looking at new financing models, supported by private sector capital, particular from the Malaysia Airports Holdings Bhd (MAHB), the operator and manager of Malaysia's 39 airports which comprise international, domestic and Short Take-Off and Landing (STOL) ports. It should be noted that some of MAHB’s airports are reaching their maximum capacity, particularly at the main terminal Kuala Lumpur International Airports and other airports in Penang, Kuching and Subang.
In turn, MAHB is formulating financing models for its airport infrastructure development to boost passenger traffic and tourism sector in the country. Its basket of capital expenditure (capex) financing models include a review of airport tax mechanism and user fee charges by the government. Currently MAHB pays about 12% of user fees to the government including PSC, parking, landing, check-in counter charges, hotel revenue and assets within the airports land, which amounts to between USD124.7 million to USD166.6 million annually.
MAHB is also keen to be inclusive in the development and integration of the nation’s socioeconomic goals while providing capacity expansion and deriving value from the connectivity to drive local tourism in the rural and remote areas.
The Malaysian aviation industry had contributed a total of USD1.97 billion in direct benefits, USD 2.59 billion in indirect benefits, USD 369 million in induced benefits and USD 6.3 billion in tourism benefits. According to the International Air Transport Association (IATA) economic report, air passenger growth in Asia Pacific is expected to remain robust, with the region being one of the fastest growing and largest contributors to the air travel market.
(Source: The New Straits Times; The Star Online)
The Malaysian government is looking to conduct a feasibility study for a 3rd port on Carey Island. Carey Island is already home to 2 major ports – North Port and West Port under the Port Klang Authority, this follows the Port Klang Masterplan 2010-2030 that was completed in May 2011, and had covered the need for a third port.
This urgency is also a response to the fact that the two existing ports, namely North Port and West Port are nearly at full capacity, as well as competition from Singapore, which is developing a mega-port in Tuas.
Previously, a memorandum of understanding (MoU) was inked with MMC Port Holdings Sdn Bhd, Special Economic Zone Ltd and Sime Darby Property Bhd to conduct a feasibility study for this 3rd port; however, the MoU is non-binding and the government has decided that such a feasibility study is better conducted by an independent provider, from companies who do not have a vested or potential interest in this project.
The Port Klang Authority has been tasked to release a request for proposals (RFP) for the feasibility study for a 3rd port on Carey Island. The study is expected to cover all aspects that include environmental impact, social impact, market, pre-feasibility study, dredging, reclamation and other essential elements.
(Source: The Edge Markets, The Star)
Serba Dinamik Holdings Berhad (SDHB), an engineering services company has recently inked a heads of agreement (HoA) with the Netherlands-based Hill International N. V., a renowned global construction consulting firm to commence professional and development services for Pengerang International Commercial Centre (PICC) in Pengerang, Johor. PICC was initiated by SDHB, and is part of its MYR 1.4 billion (USD 343 million) Pengerang Integrated Development Project covering an area of 132 acre which it planned to develop within the next five years’ time.
According to SDHB the HoA specified basic principles and understandings between both parties with a plan to enter a memorandum of understanding (MoU) to perform a definitive agreement on the Pengerang project. Based on the HoA, Hill International will be the joint delivery partner for PICC and provide management and construction services for the project. SDHB has agreed to the design and construct of the PICC, and appointed the consortium of necessary consultants, advisors and subcontractors.
The HoA allows SDHB to leverage on Hill International’s experience and overseas presence in providing project and construction management, besides opening the door for collaboration on the latter’s luxury tourism project in Indonesia which it is currently working on with a local Indonesian company. The HoA will remain in place until a MoU is signed between the two parties on or before this August 31st.
(Sources: The New Straits Times; The Malaysian Reserve)
Malaysia's current government said that it will inject additional necessary funds and complete the Tun Razak Exchange (TRX) development in Kuala Lumpur. The 70 acreTRX project was launched by the previous prime minister, Najib Razak, as a leading centre for international finance and business and its masterplan includes 26 buildings and gross floor area of 21 million sq ft spread across which covers office, residence, hotel, retail, food and beverage and cultural spaces.
However, funds allocated for TRX were redirected to pay the debts of troubled state fund 1Malaysia Development Berhad (1MDB). TRXC, the developer of TRX was formerly a subsidiary of 1MDB and called 1MDB Real Estate Sdn Bhd. Its ownership was transferred to the Ministry of Finance in May 2017 acting on the advice of Parliamentary Public Accounts Committee, due to inability to secure land sales or bank financing. TRXC is also responsible for the 486-acre Bandar Malaysia development in Kuala Lumpur.
Contiuation of the project will help the government avoid payment of MYR 3.5 billion (USD 0.87 billion) in compensation claims. According to news reports, the government hopes to recoup misappropriated funds, repay borrowings, recover funding investments and opportunity costs, and potentially achieve a small surplus return by completing the TRX and realising the full value of the project, estimated at MYR 7.6 billion (USD 1.88 billion).
Since 2012, the Malaysian Government has injected MYR 3.69 billion (USD 0.9 billion) into TRXC. Additional funding of MYR 2.8 billion (USD 0.7 billion) will be provided to complete the infrastructure works,bringing total expenditure to MYR 6.5 billion (USD 1.6 billion) and the amount will be paid in tranches till 2024.
Seven plots of land with a value of MYR 2.88 billion (USD 1.6 billion) have been sold to Lendlease, Tabung Haji, Mulia Group, Affin Bank, WCT, IJM Corp (building to be tenanted by Prudential) and HSBC. The Mulia Exchange’s 106 Tower and the Prudential building are expected to be ready by early 2019. TRXC is seeking more local and foreign investors for the project.
(Source: The Straits Times; New Straits Times; Star Online)
The Malaysian Prime Minister, Tun Dr. Mahathir Mohamad has made it a priority to cut the national debt and has pledged to review major projects agreed upon by the previous government. Malaysia’s current national debt and liabilities currently stand at around one trillion Ringgit (USD 251.3 billion) or 80% of its GDP. The new government has expressed confidence that the debt can be reduced by 200 billion Ringgit (USD 50.3 billion) by doing away with huge projects.
Such projects include the 55 billion Ringgit (USD 13.82 billion) East Coast Rail Link (ECRL) which is a major part of Beijing's Belt and Road infrastructure push. At that cost, the ECRL would emerge as the largest rail infrastructure project in Malaysia. The railway project was planned to stretch 688 km, connecting the coast along South China Sea at the Thai border in the east part of Peninsular Malaysia with the strategic shipping routes of the Straits of Malacca in the west. The project is being built by China Communications Construction Co Ltd, and is being mainly financed by a loan from China Exim Bank. Following the latest announcement by the Ministry of Finance, the ECRL project is being renegotiated instead of reprieved to reduce the costs. The announcement sent the shares of several local companies engaged in the project to increase, including T7 Global Berhad which formed a consortium with CMC Enginering Sdn Bhd and Eastern Pacific Industrial Corp Berhad (EPIC) to undertake the Terengganu's parcel of the project worth RM 60 million.
Malaysia is also going to look into how it can reduce the cost of any potential exit from the High-Speed Rail (HSR) project to link its capital Kuala Lumpur with Singapore, reducing travel time between the two cities to 90 minutes from the current 4 hours by road. The HSR is valued at about USD 17 billion and it is currently out for tender. It is scheduled to be completed by 2026 should the project commence this year. After earlier news reports stating that the HSR project might be scrapped, latest media reports quote the Malaysian PM saying that the project is postponed and not scrapped.
(Sources: The Edge Markets, Reuters, Nikkei Asian Review, Straits Time)
The Kuala Lumpur – Singapore High Speed Rail (KL-SG HSR) project which is planned to be completed by December 2026 is currently in the phase of acquiring parcels of land along the railroad, which is expected to be completed by the second half of 2018. According to the project delivery vehicle for the Government of Malaysia, MyHSR Corporation Sdn Bhd, the land acquisition is a long process and must be completed before advanced work can take off.
Altogether there will be seven stations to be built along the railroad in Malaysia located in the cities of Bandar Malaysia, Sepang, Seremban, Melaka, Muar, Batu Pahat and Johor Bahru. The stations are expected to attract investments to the cities and bring in economic growth, employment and immense benefits to the locals, eventually leading to the emergence of mega cities or future cities in these locations in the future.
MyHSR has appointed two local JV consortiums as the project delivery partners (PDPs) for the construction of civil works for Malaysia which will take around eight years to be completed, namely MRCB-Gamuda JV and YTL-TH Properties JV. MRCB-Gamuda JV will be working on the northern line of the project comprising three domestic stations and one international station between Bandar Malaysia in Kuala Lumpur and Melaka with an alignment of 135 kilometres. YTL-TH Properties JV on the other hand will continue from Melaka to Iskandar Puteri in Johor, consisting two domestic stations and one international station in the southern line spanning 200 kilometres. A total of 70,000 job opportunities are projected to be available for Malaysian contractors to deliver the civil work packages, ranging from advisory, engineering and design to certification, testing and commissioning.
(Sources: New Straits Times, The Star)
In April 2018, the Government of Malaysia announced it would be prioritising numerous public infrastructure projects across the country. Public infrastructure projects under the government proposal include airports, railway and road system, urban developments, energy transportation and energy efficiency initiatives, marine and border security infrastructure, as well as people’s infrastructure projects. Some of the key proposals by the government are:
Airports: Selected airports in the country – Langkawi International Airport, Kota Airport and Sandakan Airport – would be upgraded with an allocation of MYR 1.3 billion (USD 334 million). Penang, despite being an Opposition-held state for the last 10 years, would also see an upgrade of its international airport. New airports would also be built at Mukah and Lawas with an allocation of MYR 758 million (USD 195 million).
Railway: For rail connectivity, the government is planning improvements and additions of new links between Johor Baru and Singapore for the Rapid Transit System (RTS) and the Kuala Lumpur-Singapore High Speed Rail (HSR). In the east coast, the construction of the East Coast Rail Link (ECRL) from Port Klang to Pengkalan Kubor is also under planning stages as is the electrified railway line from Subang Jaya to the Subang Skypark Terminal. Repair works are further expected to be carried out for KTM coaches, locomotives, railway tracks and bridges in the east coast, while the Sabah railway track from Halogilat to Tenom would be also upgraded.
Public transport infrastructure in the Klang Valley would be further improved with the construction of Phase 3 of the Light Rail Transit (LRT) and the Mass Rapid Transit (MRT). The government is also expected to upgrade the Electric Train Service (ETS) coaches.
Roads: In expanding the road network, the government announced it would complete the West Coast Expressway from Banting to Taiping by 2020 as well as the third phase of the East Coast Expressway. The Central Spine Road would be built to connect Kelantan, Pahang and Negeri Sembilan, reducing congestion and driving new economic growth in the East Coast Economic Corridor. In Sabah and Sarawak, transportation networks and interconnectivity would be strengthened by upgrading 12,500 kilometres of rural roads. In order to reduce emissions of carbon dioxide, the greater usage of electric buses is also under consideration.
Urban developments: Further to the transport infrastructure, new modern and green urban developments along public links, such as ECRL, HSR and Gemas-Johor Baru Dual-Track Railway Line are planned for expansion.
Energy: On the transportation of energy side, the Multi Products Pipeline (MPP) project coverage area would be expanded by 600 km to increase distribution efficiency in Peninsular Malaysia. The MPP project involves the transportation of petroleum products from refineries in Melaka and Port Dickson to Central and Northern region of East Peninsular Malaysia. A 140-kilometers gas pipeline would be also built from Ayer Tawar to Ipoh. In Sabah and Sarawak, electricity supply would be expanded with an allocation of MYR 2.3 billion (USD 591 million). The Trans Sabah Gas Pipeline (TSGP), worth MYR 4.2 billion (USD 1 billion), would be built to stabilise electricity supply and spur economic growth in Sabah.
Energy efficiency: The government has also announced its plans to optimise the usage of electricity by installing smart metering and LED lights to around 8.5 million users nationwide.
Marine: At sea, the government is expected to significantly propel Malaysia’s competitiveness in the region’s port services industry by building a new, modern port in Carey Island as the latest maritime hub with an investment of MYR 200 billion (USD 51.4 billion).
Border Security: Langkawi’s jetty facilities, terminal and Customs, Immigration and Quarantine (CIQ) Complex, according to the government, would be upgraded with an allocation of MYR 86.5 million (USD 22 million) to attract more tourists and foreign investment. CIQ Complexes will be also built in Tebedu, Sarawak and Kalabakan, Sabah, to increase economic growth and border security.
People’s infrastructure: people’s infrastructure is also covered under the government plans, including village roads, bridges, streetlights and sewerage projects. Drainage and irrigation systems in 143 locations would be improved to increase paddy output throughout the country. Interconnectivity between rural areas would be enhanced through construction of 383 small bridges throughout the country. The government also plans to build and upgrade 839 kilometers of plantation roads to increase accessibility to small farms, while 422 kilometers of roads in FELDA areas would also be improved. The government also expects to build and upgrade bridges in critical areas, such as in Batang Lupar, Temerloh, Kota Tinggi and Batang Kali.
(Sources: New Straits Times)
Siemens has received, in consortium with Rasma Corporation Sdn Bhd, an order from Prasarana Malaysia Berhad, the operator of Malaysia's Light Rail Network (LRT), for the supply and installation of signaling and train control system for the planned fully automated Light Rail Transit 3 Line (LRT3) in Kuala Lumpur, Malaysia. MRCB George Kent Sdn Bhd is the appointed Project Delivery Partner of LRT3.
The new line, with 38 kilometers and one depot, is expected to be completed in February 2021. The scope for Siemens also includes the installation of an intrusion preventive system and a platform screen door system. The LRT3 line will be fully automated with Grade of Automation 4. The planned route for the LRT3 will ultimately link Bandar Utama to Klang, spanning 26 stations – 25 elevated above ground and one underground. Once completed, the line will be incorporated into the existing Klang Valley Integrated Transit System in the city. It will provide connectivity to the western part of the Greater Kuala Lumpur/Klang Valley area. The project is expected to benefit 74,000 commuters daily and 500,000 residents as it will mobilize 36,720 passengers per hour in a single direction by improving connectivity and reducing traffic congestion.
Tenaga Nasional Bhd (TNB) and Telekom Malaysia Bhd (TM) have announced their partnership to expand the Malaysia’s fiber-based high speed internet access nationwide and bring down cost of the service.
The two government-linked companies (GLCs) inked a MoU to deliver on the government’s Nationwide Fiberisation Plan (NFP). The collaboration will capitalize on the combined strength of both GLCs in terms of reach, infrastructure and expertise. The synergies are expected to enable the most efficient cost structure, and further accelerate the fiber broadband network reach.
The current initiative is in line with the government’s aspirations to drive Malaysia’s Digital Economy as envisioned under both the NFP and the High Speed Broadband projects. TNB and TM said the roll-out will ensure safety and security of the nation’s strategic and critical infrastructure. The proposed network will also continue the existing open access participation of industry players to promote private sector competition in retail broadband.
It is reported that the “last-mile” fiberization to connect households nationwide, particularly in rural areas, could cost some MYR 10 billion (USD 2.6 billion).
(Sources: New Straits Times; Telecom Asia; The Star Online)
Japan will intensify its efforts in bidding for the Kuala Lumpur (KL)-Singapore high-speed rail (HSR) contract, which will be awarded by year end. The joint venture contract between Malaysia and Singapore is to build South East Asia’s largest ever infrastructure project comprising 350-kilometer HSR connecting the cities of Kuala Lumpur and Singapore. Scheduled to start operating in 2026, the HSR is expected to cut the travel time between the two cities to 90 minutes. The bid for the contract must be submitted by the middle of the year, and is expected to also attract bidders from South Korea, China and France.
Japan is banking on the Shinkansen, its best HSR technology and the first invented and world-renowned HSR system. According to the Japanese Embassy in Malaysia, the HSR technology, added with the total technology transfer and local vendor development, will greatly benefit Malaysian and Singaporean companies including small and medium enterprises.
Aside from best suited technologies, Japan is also looking to offer the most comprehensive financial package which will alleviate the financial burden for both Malaysia and Singapore in introducing the system. Malaysia’s Finance Ministry estimates that the project, which will have eight stations in total, would cost around MYR 50 billion to MYR 60 billion (USD 12.3 billion to USD 15.4 billion).
(Sources: Bernama; The New Straits Times)
Finland-based Oy Meclift Ltd, a leading specialist in container handling and associated operations, has announced its appointment of Asia Port Trading Co. as its sole distributor in Malaysia. Asia Port, which has capabilities in the supply of port equipment systems and port operations services, has over 30 years of experience in the sector and is one of Malaysia’s longest established independent supplier of port equipment systems and port operations services. Its offices are located in key port industry locations – a head office in Port Klang, serving the premier ports of Port Klang and Westport in Malaysia and a branch office in Penang, the busy port serving the northern growth area of Malaysia.
Malaysia has benefited from China's investments to raise freight-handling capacity in Malaysia's ports. Chinese companies are investing USD 7.2 billion in the Melaka Gateway, USD 2.8 billion in the Kuala Linggi Port, USD 1.4 billion in Penang Port and USD 177 million in the Kuantan port projects. These investments will greatly increase the capacity of the country's logistics sector in years to come, positioning it as a rival to regional centers such as Singapore.
(Sources: Oy Meclift Ltd; Asia Port Trading Company Sdn Bhd; The Star)
Advancecon Infra Sdn Bhd, a subsidiary of Advancecon Holdings has been awarded the MYR 75.5 million (USD 18.4 million) contract for the infrastructure works on the South Klang Valley Expressway (SKVE). The contract is effective for two years, during which the Advancecon Infra is expected to undertake site clearance, soil treatment works and drainage works for SKVE. Advancecon Infra is also assigned to do pavement works, road furniture, environmental protection works, traffic management and control, as well as street lightings and mechanical and electrical infrastructure. Advancecon Infra will start the works on January 2, 2018, and is expected to complete by December 31, 2019.
(Sources: The Edge Markets; The Sun Daily)
Jacobs Engineering Group has been awarded the role of Lead Trackwork Design Consultant for the Klang Valley Mass Rapid Transit (KVMRT) Sungai Buloh-Serdang-Putrajaya (SSP) Line in Malaysia. The KVMRT project involves the construction of a rail-based public transport network comprised of three lines. The SSP Line, which is the second mass rapid transit line to be developed, has an estimated construction cost of approximately USD 7.6 billion.
Jacobs will work with the China Communications and Construction Company (CCCC) and George Kent (GK) Joint Venture, which was awarded the approximately USD 234 million contract for the engineering, procurement, construction, testing and commissioning of track work, maintenance vehicles and work trains on the MRT SSP Line by MRT Corporation.
The MRT SSP Line will be approximately 32.4 miles in length, with 8.4 miles of rail in tunnels and the remaining on elevated structures. It will include 26 elevated stations, 11 underground stations and a maintenance depot. The line will serve a corridor with a population of nearly two million people. Jacobs’ services include the design of trackwork, emergency walkways, cable containment systems and stray current control systems. The project will be delivered in accordance with international systems engineering and assurance practices to ensure a fully interfaced and compliant design. Jacobs will provide design support services throughout the construction period and use building information modeling (BIM) to support a fully integrated digital engineering approach.
(Source: Jacobs Engineering Group)
Five additional ports have joined in the China-Malaysia alliance to strengthen the local port industry and port technology of both countries. Port co-operation pledges were initially signed by six Malaysian Federal Port authorities: Bintulu Port Authority, Johor Port Authority, Kuantan Port Authority, Malacca Port Authority, Penang Port Commission and Port Klang Authority.
They were joined by 10 Chinese Ports: Beibuwan Port Administration Bureau, Fujian Fuzhou Port Authority, Guangzhou Port Authority, Guangzhou Port Authority, Jiangsu Taicang Port Management Committee, Ningbo Port Company Limited, Port of Dalian Authority, Ports Administration of Shenzhen Municipality, Port and Shipping Authority of Haikou City, Shanghai International Port Group and Xiamen Port Authority.
The additional 5 ports that have joined the alliance are Kemaman Port, Sabah Ports Authority and Kuching Port Authority (from Malaysia) and Tianjin Port and Qingdao Port (from China).
The collaboration between Malaysia and China aims to enhance the local port industry and technology, container processing and speeding up of processes by reducing red tape. This is beneficial to Malaysia's goal to become a top logistics hub in the South East Asia region, as it is already improving its cargo capacity and infrastructure. Success in building the necessary infrastructure and technology will help Malaysia become a cargo and logistics hub, enabling it to become a point of entry for goods destined for Thailand and Indonesia.
(Source: The Star Online)
According to Malaysia's Construction Industry Development Board, the construction sector grew by 8.2%, from USD 32.79 billion in 2015 to USD 38.88 billion in 2016. In terms of construction volume, there were 7,455 projects in 2015, and 6,305 projects in 2016. The growth of the building and construction industry in Malaysia continues to surpass the growth of other economic sectors in the country. The sector is expected to perform well in 2017, and to grow to USD 40.54 billion this year.
Growth is driven mainly by several residential and buildings projects and engineering activities happening across the country. Construction in the residential buildings sector played a vital role in the industry's growth, as high-end apartments and affordable housing are being built in Klang Valley and Johor, raising the residential building expansion rate to 7% for this year compared to 4.9% in 2016. Some of the notable infrastructure projects include the construction of Forest City and Petroliam Nasional Bhd in Johor, the Bandar Malaysia and Tun Razak Exchange in KL, the Melaka Gateway projects and the East Coast Rail Line project from Malaysia to Singapore. Development is ongoing for some of the projects, while others are expected to commence in 2018.
(Sources: Construction Industry Development Board; Panels & Furniture Asia; The Star)
One of the largest investments that Malaysia has inked with China is the East Coast Rail Link (ECRL), which connect ports on the east and west coasts of Peninsular Malaysia and could alter regional trade routes which currently ply between the busy Strait of Malacca and the South China Sea via Singapore. The first phase of the ECRL will connect Wakaf Baru in Kelantan to ITT Gombak at a cost of RM 46 billion (USD 10.74 billion). The second phase will join the Integrated Transport Terminal Gombak to Port Klang, a distance of 88 km, at a cost of RM 9 billion (USD 2.1 billion). The rail connection between the west and east coasts of Peninsular Malaysia will be a catalyst to not only growth and businesses between the corridors but also create jobs and open up the hinterland of the peninsula to many more business opportunities. The ECRL linking Port Klang and Kuantan Port will slash 30 hours of travel time for cargo shipping through the Port of Singapore but at a slightly higher cost.
(Source: The Star Online)
Malaysia has signed a number of MoUs with China, as part of China's Belt & Road initiative. The two countries will cooperate in infrastructure development in various areas:
(Source: The Star Online)
Malaysia announced that it is officially looking for a new master developer for the country's largest property project, Bandar Malaysia, with the government retaining 100% ownership of the development. An organization owned by Malaysia's Ministry of Finance, TRX City, has abruptly terminated a deal with consortium Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corp (CREC) to own and develop Bandar Malaysia, due to its failure to meet its payment obligations.
The submissions for the request for proposal process have commenced, with submissions due by June 30 and the final decision on the new master developer will be made by TRX City and the ministry by July 14. According to the statement by Malaysian Ministry of Finance, parties interested in becoming the master developer must be able to display speed of delivery and financial capability to deliver a project of this scale.
(Source: The Straits Time, The Edge Market)
According to the Construction Industry Development Board (CIDB), the construction sector is expected to grow by 8% to USD 39.1 billion this year, boosted by the numerous mega infrastructure projects in the country. Projects such as the Refinery and Petrochemical Integrated Development project in Johor, Mass Rapid Transit Two in the Klang Valley and the Pan Borneo Highway connecting Sabah and Sarawak, would continue to drive demand in the sector.
Construction growth was 8.3%, or USD 32 billion in 2015 and 7.5%, or USD 38 billion in 2016. In terms of construction volume, there were 7,455 projects in 2015, and 6,305 projects in 2016. The second highest contributor was residential projects, which accounted for 23% USD 8 billion, followed by non-residential construction at 22.5% USD 8.6 billion.
(Source: Bernama, The Edge Market)
TRC Synergy is eyeing more infrastructure projects to replenish its order book after securing a part of the Mass Rapid Transit Line 2 (MRT2) project recently. This comes as TRC Synergy’s wholly-owned subsidiary, Trans Resources Corporation Sdn Bhd, has successfully clinched a contract worth USD 198 million, the second largest contract in the final viaduct tender award by Mass Rapid Transit Corporation Sdn Bhd (MRT Corp) for MRT2.
The section will be the group’ first viaduct package as it was involved in depot and ancillary works in Mass Rapid Transit Line 1 (MRT1) previously. Public Invest Research was positively surprised by the latest development by the company on getting a work package of MRT2 in particular the amount although it believed that TRC Synergy could be a beneficiary of planned rail projects in Malaysia. With the latest contract award, the research firm believed the company has the ability to compete with other construction companies in getting a slice of the jobs from MRT Corp as there was concern over the cancellation of a small project by MRT Corp late last year.
(Source: The Star Online)
Malaysia has confirmed that it is to construct a giant port costing around USD 45 billion on Carey Island, which is located in the Malacca Straits, one of the busiest shipping routes in the world, the Malacca Strait, the port would span more than 100 sq km on the island next to Port Klang, complete with free trade zones, residential and commercial developments as well as other supporting infrastructure. The port could be operational by 2025. As part of the project, Malaysia has also said it plans to upgrade the nearby Port Klang.
Plans are underway for two other ports along this waterway as well in Malacca, less than two hours away from Carey Island - the RM12.5 billion Kuala Linggi International Port as well as a deep sea port and cruise terminal at the Melaka Gateway.
Malaysia has the fourth largest economy in Southeast Asia and is located very close to Singapore, making it a key player in the maritime arena. The Malaysian government have long held plans to build a new port and expand on the progress made by Port Klang, the eleventh biggest port in the world.
(Source: Port Technology, Channel NewsAsia)
The outlook for Malaysia's construction sector looks promising in 2017, particularly for infrastructure construction players, given the slew of government projects that are ongoing, as well as those in the pipeline. The ongoing projects like the Mass Rapid Transit 2 (MRT2), Tun Razak Exchange and Petronas’ Refinery and Petrochemical Integrated Development (Rapid) project site in Pengerang will largely contribute to the order books of infrastructure construction players for the year.
Apart from ongoing projects, the construction sector holds more upside in light of the 12.8 billion ringgit (USD 2.85 billion) Sabah portion of Pan Borneo Highway as well as the upcoming High Speed Rail (HSR) projects.
In addition, there are more major property development projects planned in Sabah, such as the redevelopment of Kota Kinabalu (KK) Port with an estimated gross development value of over 5 billion ringgit.
In addition, there are more major infrastructure development projects planned in Sabah, such as the redevelopment of Kota Kinabalu (KK) Port with an estimated gross development value of over USD 1.17 billion; the USD 510 million Aeropod project in Tanjung Aru being developed by SP Setia; and the USD 930 million Tanjung Aru Eco Development being developed by the state.
(Sources: New Straits Times, Bernama)
Malaysia will step up its logistics infrastructure in its quest to become a regional hub, and it has outlined 12 projects valued over MYR 12.75 billion (USD 2.97 billion) to improve its main ports and airports. An additional MYR 34.03 billion (USD 7.93 billion) worth of investments are also being studied involving projects in rail, road, ports and airports enhancement. Among the big projects being considered are the construction of a third container in Port Klang, a 550 km East Coast Railway Line to connect Kuala Lumpur, Kuantan and Tumpat, and Serendah-Port Klang rail loop line which bypass KL Sentral to help decongest the railway line.
The logistics sectors contributes 3.6% to GDP at the moment, and is expected to rise to 4.3% by 2020. Malaysia has recently spent MYR 3 billion (USD 699.46 million) to expand the Kuantan Port to make it a deep-sea port. The government is also building Melaka Gateway port with a total investment of MYR 30 billion (USD 6.99 billion).
(Source: The New Straits Times)
Malaysia and Singapore have finally signed a binding contract formalizing technical, safety and security requirements, plus commercial and regulatory frameworks of the Malaysia-Singapore High-Speed Railway (HSR) project. The contract ensued from signing of a MoU last July on the project between both countries. Estimated to cost USD 15 billion, the 350 km rail line will shorten the travel time between Kuala Lumpur and Singapore to 90 minutes by railway, creating an additional option of travel to people between the two cities. The project is planned to be completed by December 2026, and has also been mooted to improve the socioeconomic situation of other cities lying alongside the railway, with transit stations located in Putrajaya, Seremban, Ayer Keroh, Muar, Batu Pahat and Iskandar Puteri.
Both countries will start to identify a joint development partner in early 2017, followed by an international tender call by fourth quarter of the year to search for a privately financed assets company to design, build, finance and maintain the rolling stocks and rail assets. The decision of the award is expected to be announced by the countries in early 2018.
At the moment three countries China, Japan and South Korea have been lobbying hard to win the project. While the Singapore’s Prime Minister Lee Hsien Loong did not refute the possibility of having a consortium from the three countries to work on the project, it is unlikely to happen as South Korea has dismissed the possibility from their available options.
(Sources: The Korea Times; MyHSR)
China has signed agreements with Malaysia on investment projects related to railway, energy, defense and joint development of naval ships for Malaysia. The deals were signed during the official visit by Malaysia’s Prime Minister Mohd Najib to China, from October 31 to November 6, 2016. During the visit Najib and China’s Premier Li Keqiang discussed issues covering areas of infrastructure, education, defense, agriculture, tax, quality inspection and customs.
China has expressed keen interest in joining the construction for Malaysia’s east coast railway connecting Kuala Lumpur to Kuantan and Tumpat which will commence next year, as well as the gas pipeline projects in Sabah. The country, through its Belt and Road Initiative, has been increasing its presence in Malaysia recently in its effort to strengthen its relationship with ASEAN countries to promote regional peace and stability.
(Sources: Bernama; Xinhua; Channel News Asia)
Tata Communications of India is looking to build two data centers in Malaysia and Middle East in the next six to twelve months. The growing demand for internetworking in these regions has prompted the company to expand its cloud data centers infrastructure.
Tata Communications currently has an office in Singapore, as well as in Hong Kong and Sydney in Asia Pacific. It has four data centers in India, two data centers in Singapore, two in the UK and one in Hong Kong, forming part of its 44 data centers network worldwide.
The company formed a strategic alliance with Pacific Link Telecom in Malaysia in 2014, which helped helped extend Tata Communication's data center portfolio in Malaysia.
(Sources: Data Economy; Tata Communications)