HSS Engineers to pursue data centre opportunities

The company is engaging with global specialists and is in an advanced talk with one of the parties involved

by ASILA JALIL / graphic by TMR

HSS Engineers Bhd is partnering leading data centre specialists to embark on the development of data centres in Malaysia and South-East Asia following demand for such centres amid the Covid-19 pandemic.

Its executive vice chairman Tan Sri Kunasingam Sittampalam said the company is engaging with global specialists and is in an advanced talk with one of the parties involved.

“At least one of them is at the very final stage of discussion. They do work with Amazon.com Inc, Microsoft Corp and Apple Inc and they do not have a partner in this part of the world.

“We will sign a memorandum of understanding with them soon,” he said in a virtual press briefing after the company’s sixth AGM yesterday.

He, however, did not disclose any names of the parties involved and how many parties the group is engaging with in regards to the data centre development.

Kunasingam said the pandemic has caused businesses to transition their operations online which has led to a high demand for data centres.

As the Singapore government had imposed a moratorium on the establishment of new data centres due to power and land shortage, he said neighbouring countries such as Malaysia and Indonesia can benefit from the spillover demand.

“The sector in Malaysia is expected to experience revenue growth of more than US$800 million (RM3.3 billion) by 2030. In addition to this, industry statistics anticipate the data centre market in SouthEast Asian countries, such as Singapore, Malaysia, Indonesia and Thailand, to grow at 14% compounded annual growth rate to US$3.5 billion in the next decade,” he said.

He added that the company is leveraging its project management consultancy (PMC) experience to directly pursue opportunities with Digital Nasional Bhd for the implementation of 5G technology in the country.

Kunasingam said the project consists of multiple stakeholders, project complexities and intensive resource requirements.

As such, it would require significant coordination in the implementation which is a scope similar to the group’s current role as DMO (delivery management office) for multiple projects under the Northern Corridor Implementation Authority.

“Actually, the government has called for a bid and we have participated in it. I cannot disclose further on it,” he said when asked if the company is in talks with the government for its participation to support the 5G rollout project.

The engineering and project management consultant is positive on its prospects in the current year on the back of its new contract wins and the anticipated rollout of new contracts for ongoing mega projects in the second half of 2021 (2H21).

In April, the government appointed the group to provide PMC services for the Pan Borneo Highway Sabah project for RM144.9 million.

Other PMC projects sinclude the proposed expansion and construction of a new healthcare facility for National Heart Institute and engineering services for major infrastructure such as East Coast Rail Link (ECRL) and Iskandar Bus Rapid Transit projects.

These new contracts have expanded the group’s current orderbook exceeding RM600 million which can sustain the group’s earnings for the next three to five years.

The group’s tender book currently stands at RM437 million where 50% of the amount is for railway projects, followed by projects in the water sector (25%), highway (15%) and infrastructure (10%).

“Despite the implementation of the full Movement Control Order on June 1, our operations remain uninterrupted as we play a key supporting role for ongoing infrastructure projects.

“We are optimistic the government will speed up the implementation of mega infrastructure projects, which include the Mass Rapid Transit Line 3 (MRT3), Penang Transport Master Plan and Johor Baru-Singapore Rapid Transit System in 2H21 to rejuvenate the economy.

Our participation in MRT1, the ongoing MRT2 and ECRL is a testament of our engineering capabilities, as well as positioning us favourably to secure more projects,” he added.

HSS Engineers’ shares closed one sen or 1.56% lower yesterday at 63 sen, valuing the company at RM309.83 million.