Ekovest brushes aside ringgit concerns in relation to highway project

KUALA LUMPUR (Dec 16): The weak ringgit against the US dollar is not expected to have a major impact on the construction of Ekovest Bhd’s Setiawangsa-Pantai Expressway (SPE), formerly known as the Duta-Ulu Kelang Expressway (DUKE) Phase 3.

Ekovest managing director Datuk Seri Lim Keng Cheng said at present, 30% of the components used to produce steel bars for the group are imported.

“However the usage of steel bars in the whole construction [of the SPE] is only 10%, so it’s not a very big impact. With the drop in currency, raw materials from local suppliers have also become cheaper.

“So [the weak ringgit presents] neither negative nor positive impact to the group. I would say it’s status quo,” he told reporters on the sidelines of the group’s media appreciation event yesterday.

On whether the group has found a potential partner for the SPE project, Lim said that is still an ongoing process.

“We are open [to discussions] now, but we would like to achieve 50% completion for our highway first, as that would give people the confidence in [mitigating] construction risks, and the highway would also have a better value.

“But we definitely need external capital for the business. Like I always say, the big cake needs to be shared,” he said.

Lim did not provide any timeline for the completion of and partner selection for the project, but shared that the SPE’s construction is now at 8% completion.

“We are very fortunate because the SPE [is] 96% [located] on Dewan Bandaraya Kuala Lumpur land, so there are no issues [pertaining to] land,” he said.

The SPE will traverse north to south of Kuala Lumpur and will serve areas such as Universiti Tunku Abdul Rahman, Wangsa Maju, Setiawangsa, Ampang, the Tun Razak Exchange and Bandar Malaysia development corridor, and Kerinchi.

Last month, Reuters reported that Ekovest plans to list its highway operating subsidiary in 2018 with an initial public offering (IPO) that could raise at least US$500 million (RM2.23 billion).

Whether the group has started the ball rolling on the IPO process by hiring bankers, Lim said, “A lot of people have been knocking on our door. We have not decided [on the hiring].”

This article first appeared in The Edge Financial Daily, on Dec 16, 2016. Subscribe to The Edge Financial Daily here.