‘Setiawangsa-Pantai Expressway alignment still intact’

KUALA LUMPUR (May 24): Ekovest Bhd has come out to say that the alignment of the Setiawangsa-Pantai Expressway (SPE), formerly known as the Duta-Ulu Kelang Expressway Phase 3 (DUKE 3), will not be affected by the recent termination of IWH CREC Sdn Bhd’s purchase of a 60% stake in Bandar Malaysia Sdn Bhd for RM7.41 billion.

“There are no changes to the commercial contract [between Ekovest and the government],” its managing director Datuk Seri Lim Keng Cheng told The Edge Financial Daily yesterday.

A concession agreement for the SPE was signed on Jan 11, 2016 between Lebuhraya DUKE Fasa 3 Sdn Bhd and the works ministry on behalf of the government.

Ekovest is the concessionaire of the 29.8km SPE, which was earlier reported to have a 2km section running parallel to Bandar Malaysia. Concerns have surfaced that following the collapse of the share sale agreement between TRX City Sdn Bhd and IWH CREC that was inked in December 2015, Ekovest’s concession for the SPE was also at stake.

However, Lim allayed such fears, saying that the alignment of the SPE had been fixed since construction began on Aug 5 last year and is on track for completion in 2020 based on a construction period of 3.5 years.

“As far as SPE is concerned, the Malaysian Highway Authority (LLM) is the owner. They tell us which alignment to follow,” he told reporters after Works Minister Datuk Seri Fadillah Yusof’s visit to the DUKE Highway project site Phase 2 yesterday.

He added that the alignment, which was approved by the LLM, had been fixed with the signing of the concession and that it had been a committee decision.

According to Lim, the SPE is currently 15% complete and will link Setiawangsa to a portion of the Federal Highway near Mid Valley.

The SPE currently makes up RM3.74 billion of Ekovest’s external order book, which currently sits at RM12.5 billion. The group’s total order book is 13.6 billion, including internal orders, Lim said.

Ekovest’s DUKE Phase 2, which makes up RM519 million of its order book, is 97% complete, Lim said. It comprises two links, namely the Sri Damansara Link and the Tun Razak Link, and is targeted to be open to the public in August.

Ekovest is 32% controlled by its co-founder and chairman Tan Sri Lim Kang Hoo, who also holds controlling stakes in Iskandar Waterfront City Bhd (IWCity) and Iskandar Waterfront Holdings (IWH). IWH holds a 60% stake in the IWH CREC joint venture with China Railway Engineering Corp (M) Sdn Bhd.

Shares in Ekovest and IWCity took a beating early this month after the Bandar Malaysia deal termination was announced, prompting Lim to issue a statement on May 4 to say that the selldown of Ekovest shares by as much as 18.2% to RM1.17 that day was just a temporary phenomenon as its “fundamentals remain strong and intact”.

Shares in Ekovest closed two sen or 1.64% higher at RM1.24 yesterday, bringing a market capitalisation of RM2.65 billion. IWCity shares, meanwhile, closed up 14 sen or 8.38% at RM1.81, with a market capitalisation of RM1.5 billion.

This article first appeared in The Edge Financial Daily, on May 24, 2017.

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