Consortium partner, EPIC, remains a Terengganu state-owned entity despite recent changes after GE14
By MARK RAO / Graphic By TMR
T7 GLOBAL Bhd is awaiting official directives from the government on the status of the RM55 billion East Coast Rail Link (ECRL) project amid speculations it could proceed should better terms and pricing are secured.
The offshore oil and gas (O&G) service provider entered into a memorandum of understanding with Eastern Pacific Industrial Corp Bhd (EPIC) and CMC Engineering Sdn Bhd for the Terengganu portion of the 668km railway in March this year.
T7 Global executive deputy chairman Tan Sri Tan Kean Soon said the company is unclear of the way forward in regards to the ECRL, as it is waiting for the new government’s decision on the project.
“Hopefully, the government will inform us and we will definitely take part in the project (if it proceeds),” Tan told the press after the company’s AGM in Selangor yesterday.
Managed by the Ministry of Finance’s unit, Malaysia Rail Link Sdn Bhd, and backed by Chinese investments, the ECRL is now under review by the current government as it reassesses projects that were deemed to have been awarded without a competitive tender.
With RM20 billion already committed to the project, the Pakatan Harapan administration is looking to proceed if it could renegotiate better terms to bring down the overall cost.
Tan said the consortium partner, EPIC, remains a Terengganu state-owned entity despite recent changes after the 14th General Election (GE14).
T7 Global chairman Datuk Seri Dr Nik Norzrul Thani Nik Hassan Thani said the Terengganu state government’s objective to ensure state players benefit from the ECRL has not changed.
“This is where we will need to work with the state government and vice versa to ensure local contractors get some of the benefits and spillover from the project,” Nik Norzrul Thani said at the same event.
He said the company welcomes the government’s move to review the rail project as this ensures more visible and effect ive pricing for the works.
“In the end, the cost for us will still be the same — as long as we do the work, we will get paid,” he said.
Nik Norzrul Thani said the new development would also allow companies that are strong on fundamentals a good chance to benefit as a result of the open tenders that would be based very much on pricing.
He said T7 Global has always been a competitive and efficient company and has never relied exclusively on government contracts.
T7 Global’s share price shot up 22.6% to close 9.5 sen higher at 51.5 sen on Monday on news that the ECRL could avoid cancellation despite earlier reports.
Business tycoon Tan Sri Vincent Tan Chee Yioun also emerged as a substantial shareholder in the company post-GE14, fuelling speculation the development could be politically motivated. This coincided with Lembaga Tabung Haji ceasing to be a substantial holder in T7 Global.
Nik Norzrul Thani said the company will take whatever opportunity that arises to collaborate and sync with Tan’s current portfolio. Notably, Tan is proposing to build a new airport in Pulau Tioman worth RM1.2 billion via Berjaya Corp Bhd — the company which he founded and currently chairs.
T7 Global undertakes property development, construction and infrastructure works via its wholly owned unit, T7 Property Sdn Bhd.
The move into infrastructure development is part of the company’s strategy to diversify away from the O&G business, which contributes over 90% of group revenue.
T7 Global is striving to grow its three core business — O&G, infrastructure and high-value manufacturing in the aerospace industry — at the same pace to reduce reliance on any one sector.
Previously listed as Tanjung Offshore Bhd, the company has been in the black over the past three quarters, most recently posting a net profit of RM1.93 million and revenue of RM55.5 million for its first quarter ended March 31, 2018.