KUALA LUMPUR (June 6): Ekovest Bhd’s joint-venture (JV) agreement with Samling Resources Sdn Bhd to jointly undertake the development and upgrading of the Pan Borneo Highway (pictured) in the state of Sarawak — Phase 1 for work package contract WPC-02 (Semantan to Sg Moyan Bridge and KSR Interchanges) — with a total contract value of RM2.1 billion, is now void, according to its filing with Bursa Malaysia yesterday.

The board of directors at Ekovest announced that its wholly-owned subsidiary, Ekovest Construction Sdn Bhd, received a letter on Monday from Samling Resources, informing that Lebuhraya Borneo Utara Sdn Bhd, the project delivery partner for the project, had not consented for the project to be subcontracted to Samling-Ekovest JV Sdn Bhd.

“We are reserving our rights in relation to the above matter and are seeking advice and will take all necessary actions as may be required,” the filing with Bursa said.

It added that the latest development will not have any material impact on the operations and financials of the Ekovest Group.

Since the 14th general election (GE14) that saw a change in government for the first time in Malaysia’s history, there have been reviews on some infrastructure projects, namely the East Coast Rail Link (ECRL), the Malaysia-Singapore high-speed rail (HSR), and the third mass rapid transit line (MRT3).

The HSR and MRT3 projects have been scrapped while the ECRL is still being reviewed.

It is not clear, however, whether the Pan Borneo Highway, to be built at an estimated RM29 billion, will suffer the same fate.

It has been reported that the Sabah portion of the highway could be reviewed by the new government.

Ekovest first announced the JV with Samling Resources in January 2017.

At closing, Ekovest’s share price gained by 2.48% or 1.5 sen to close at 62 sen with about 17.8 million shares traded, giving it a market capitalisation of RM1.35 billion.

Its share price has fallen by about 23.5% since GE14.

This article first appeared in The Edge Financial Daily, on June 6, 2018.

For more stories, download EdgeProp.my pullout here for free.

SHARE
RELATED POSTS
  1. Ekovest swings into the red in 3Q as construction business sees lower revenue
  2. ECRL project owner MRL issues RM350m bond
  3. Malaysia’s connectivity back on track and moving forward with VTL, ECRL and HSR