Dhaya Maju postpones listing after KVDT2 contract axed

The termination of DMIA’s role in the KVDT2 project has forced us to delay our listing plan, says group CEO


RAILWAY developer Dhaya Maju Infrastructure (Asia) Sdn Bhd (DMIA) has delayed its plan to list on Bursa Malaysia this year after its role in the RM4.47 billion Klang Valley Double Tracking Phase 2 (KVDT2) project was terminated.

The cancellation of DMIA’s involvement in the KVDT2 rail project has affected the company’s cashflow — effectively derailing its plan to float its shares on the main board of the local bourse in the immediate future.

DMIA group CEO Datuk Mohamed Razeek Md Hussain Maricar (picture) told The Malaysian Reserve (TMR) that the group would need time to realise its listing plan, without offering a specific timeframe.

“The termination of DMIA’s role in the KVDT2 project has forced us to delay our listing plan.

“We intended to reactivate this plan upon the success of carrying out both phases of the rail project, but without the second phase, the listing plan will take a longer time,” he told TMR in an interview yesterday.

Mohamed Razeek said the company was at the very final stage of submitting the proposal to Bursa Malaysia.

He added that DMIA was aiming for both public and institutional investors to acquire a stake in the company.

“They would have been interested because we would be able to post a decent revenue and profit after tax, which would translate into a fair dividend for shareholders,” he said.

However, without the KVDT2 in its orderbook, it would be difficult for the company to satisfy the requirements of Bursa and have enough appeal to attract investors.

DMIA, through Syarikat Dhaya Maju LTAT Sdn Bhd — its 20% joint venture (JV) with Lembaga Tabung Angkatan Tentera (LTAT) — lost the KVDT2 project for the second time since it was awarded the contract in 2018 after the government called for the project to be re-tendered.

Dhaya Maju LTAT won back the project in July last year after the company agreed to pursue the project at a discounted price of RM4.47 billion under the Pakatan Harapan (PH) government from RM5.26 billion agreed initially.

Current Transport Minister Datuk Seri Dr Wee Ka Siong, however, said the price reached by PH remains high and has since opted to reopen the tender for the project. The KVDT2 contract entails the rehabilitation of two Keretapi Tanah Melayu Bhd’s (KTMB) railway tracks, one from Salak South to Seremban and the other from Kuala Lumpur to Port Klang, spanning a total distance of 211km set for completion in April 2025.

The project is now about 20% in progress, while the KVDT Phase 1 — a rehabilitation of 42km of KTMB tracks between Rawang and Salak Selatan — is progressing at 87%. The KVDT1 project is valued at RM1.4 billion.

Mohamed Razeek said DMIA has since consolidated its strength to ensure the completion of the KVDT1 project for it to contribute positively to the group’s earnings.

The company employs more than 700 staff and has almost half a billion ringgit worth of large machine procurements.

According to Mohamed Razeek, DMIA has lost some of its future projects due to the government’s move in cancelling the KVDT2 contract.

DMIA has since taken the matter to court with the government and expects to seek compensation as works were already in progress. The company, however, has yet to determine the value of the compensation from the contract.

On Nov 20, Dhaya Maju LTAT obtained an interim injunction from the High Court to restrain the government and KTMB from instructing the JV company to stop work on the site.

The ad-interim injunction, which would be in effect until Dec 12 or any further date as directed by the court, was granted on Nov 2.

The company was also granted an interim injunction to prevent the government and KTMB from entering the KVDT2 project site and instructing the company to vacate the site.

The temporary injunction also restrains KTMB from revoking DMIA’s Licence to Occupy the site until Dec 12, 2020, or any further date as directed by the court.