DRB Hicom Bhd/MMCCorp ... July 09

Sources say it has submitted a proposal to construct a double track railway line from Gemas to Johor Baru spanning 250 km.

This proposal, which could be valued at as much as Rm8 billion, will rival a bid by privately held Global Rail Sdn Bhd that is teaming up with the Chinese consortium China Infraglobe Consortium. Global Rail and its Chinese partners were reported to have submitted a proposal early June 2009 to the finance and transport ministries.

While details were scarce at press time, it is understood that DRB Hicom would end up working with sister company, MMCCorp, as the cargo carried on the railway track would ultimately pass through the PTP.

DRB Hicom is a 55.9% controlled by tycoon Tan Sri Syed Mokhtar also has 51.8% stake in MMC Corp, his flagship vehicle, which owns 70% of PTP.

The proposed Gemas-JB line is to link up with the Seremban to Gemas stretch that is currently being built by Indian based ircon Intl Ltd. There is a possibility that the rail line may even extend Gemas and Johor Baru.

The project would include the building of stations, depots, yards, bridges and the electrification, signaling and communications systems, among others.

A source say the double track railway will bypass KL to avoid congestion in the city, where priority is given to passengers trains.

Global Rail’s largest shareholder is Zulkifli Md Hussain, who owns 51% of Global Rail. Fan Boon Heng and another director, Hau Choo Kiat, have about 30% and 20% equity interest respectively in the company.

While Global Rail and its partner have grand plans, DRB-Hicom’s controlling shareholder Syed Mokhtar is known for his links to UMNO.

MMC and its JV partner, Gamuda had secured the Rm12.5 billion northern portion of the double track project. However, if DRB Hicom secures the southern portion of the project, eyebrows would be raised because ot its track record with rail jobs. To recap, in 2005 the government had terminated a contract with the company to take over the Rm4.6 billion Rawang to Ipoh portion of the double tracking project that had been awarded to it in July 2000. The reason was that the 182 km track was 17 months behind schedule and had exceeded the budget.

For 4Q2009 ended March, DRB-Hicom suffered a net loss of Rm60.7 million on the back of RM1.5 billion in revenue.

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DRB-Hicom Bhd/EON ... Nov 2008