PPP in transit system in Iskandar Malaysia
Malaysia Steel Works (KL) Berhad (“Masteel”) and KUB Malaysia Berhad (“KUB”) signed Heads of Joint Venture Agreement today for the establishment of a joint venture to build and operate a 100 km inter-city rail transit system in Iskandar Malaysia with connection to the MRT line from Singapore.
The proposed inter-city rail transit – the first in the state of Johor – is estimated to cost over RM1 billion ($337 million), and consist of up to 25 commuter stations in major towns in the Iskandar Malaysia region in the initial stage. The operation of the inter-city rail transit shall be based on a 25-year concession.
Masteel and KUB will enter into a Joint Venture Agreement where Masteel and KUB would hold 60% and 40% equity stakes respectively in the JV company, Metropolitan Commuter Network Sdn Bhd (“MCN”).
Because of its strategic location, accessibility to leading Asian cities, proximity to some of the world’s most rapidly growing and important economies, and a range of attractive fiscal incentives, Iskandar Malaysia is poised to attract an exciting influx of foreign and high-level corporate investments as discerning investors look to benefit from its many advantages and high growth potential. What is Iskandar Malaysia? Watch this video:
The project has two components: the “Build-Transfer” of the rail transit infrastructure, and the “Own-Operate” of the inter-city train system. The project is to be undertaken in 3 phases, and expected to be completed within 24 months from project commencement.
On the socio-economic front, this project will ease traffic congestion, estimated to grow at 4.2% every year along Johor and Singapore. This will also support the vision of Iskandar Malaysia, that is to create “a world class sustainable and environmentally friendly metropolis”.
The building of the rail transit infrastructure would also be funded by project financing under the Public-Private Partnership scheme (PPP).
Malaysia Steel Works (KL) Bhd or its stock name, Masteel, is listed on the Main Market of Bursa Malaysia Securities Berhad. It is involved in the manufacturing of high-tensile deformed steel bars, mild steel round bars and steel billets. It exports 30% to 40% of its products and has 68 domestic dealers and several international trading houses as partners in Australia, New Zealand, Indonesia, Singapore, Thailand, Vietnam and The Philippines. Masteel has vast experience in the operational and maintenance of the latest process technologies and automation systems with over 40 years of track record of managing European made steel mills and industrial plants.
The major shareholders of Masteel are TYY Resources Sdn Bhd and Lembaga Tabung Haji currently holds approximately 30.40% and 8.93% respectively.
KUB Malaysia Berhad is an investment holding company listed on the Main Market of Bursa Malaysia, operating in the core business of Information, Communications and Technology (ICT), Property, Engineering and Construction (PEC) and Food-Related Industries.
In the area of PEC, KUB has spread its involvement in the government as well as private projects, amongst others, residential housing projects, vocational and industrial training institute, hospitals, schools, health and nursing Colleges, industrial and high rise buildings.
The major shareholders of KUB are Gaya Edisi Sdn Bhd and Minister of Finance currently holds approximately 29.62% and 22.55% respectively.
Source: Press release