WCT Bhd ... July 09

It is poised to clinch more public sector jobs after it secured four contracts totalling RM766.48 million for infrastructure works in Medini (Node 1) of Iskandar Malaysia.

These potential jobs include RM100 million to RM200 million additional works for the Kota Kinabalu International Airport, the RM2 billion new low-cost carrier terminal (LCCT) which should be up for tender soon, RM1 billion to RM2 billion Sabah water infrastructure project, additional works for the new Doha International Airport (NDIA) and the RM7 billion to RM10 billion Klang Valley LRT upgrade.

The Iskandar Malaysia award suggested that the government was awarding projects based on merit. This levelled the playing field and would work to WCT’s advantage.

The group has a good chance of clinching more public sector jobs as it has a track record of winning jobs by virtue of being one of the lowest cost and most efficient contractors in Malaysia.

WCT is touted as one of the main winners of the Klang Valley LRT upgrade/extension, a priority mega project scheduled for rollout in 2H09. Tenders are expected to be called in 4Q09.

With the new contracts, WCT’s outstanding order book rose 35% to RM2.9 billion, surpassing WCT’s guidance of RM1 billion of new contracts by year-end (2009).

The jobs awarded to WCT were the second sizeable infrastructure project to be awarded after the award of the tunnelling portion of Interstate Water Transfer Scheme earlier, which reaffirmed that pump-priming in the country was well underway.

With this LOA, WCT is the third local contractor after Loh & Loh and Salcon to be awarded a contract for infrastructure works in Medini this year (2009). It is also the biggest beneficiary of infrastructure projects in Iskandar to date. The RM767 million total project cost represents the biggest package to be dished out to a single contractor in Iskandar. It is also the largest public sector job to be awarded to a local contractor since November 2008.

WCT was currently holding two letters of intent (LOI) for infrastructure works in Sabah worth about RM500 million. They have also proposed another project in Sabah estimated to be worth RM1 billion.

WCT was in a good position to secure work from the proposed new LCCT terminal and also from NDIA. To recap, WCT had received additional works from NDIA worth RM300 million earlier 2009.

WCT intends to execute this recent contract swiftly and bid for more jobs from the same client by using its track record.

WCT is also seeing encouraging signs of a re-acceleration in Middle East job flows — as crude oil prices are hovering above US$60 (RM214.20) per barrel. With the Abu Dhabi F1 project on track to be completed by next month (Aug 2009), it is eyeing more repeat jobs within the massive US$40 billion Yas Island development.