KUALA LUMPUR (Feb 21): PLB Engineering has signed a conditional joint development agreement (JDA) with the Penang state government and its development arm to undertake rehabilitation works for the Jelutong dumpsite along Lebuhraya Tun Dr Lim Chong Eu in Penang in exchange for three-fourths of the rehabilitated land.
PLB said it will be undertaking rehabilitation works of the existing dumpsite — currently used for the disposal of various types of waste — on state land measuring approximately 84 acres, and additional area in excess of the existing area.
The group will be constructing and operating a new integrated recycling centre on the site to be acquired by PLB for the sorting and recovery of construction and demolition waste, green waste, and excavation waste, for reuse or recycling, according to an exchange filing today.
In carrying out the rehabilitation works, PLB may also procure the use of an area in the Phase 3 site of Pulau Burung sanitary landfill in Seberang Perai Selatan as an interim site for the storage and processing of such waste.
According to the filing, the JDA — signed between PLB, the state government and Penang Development Corp (PDC) — will allow PLB to undertake the project with PDC being the project manager to oversee the implementation of the project.
Under the JDA, PLB will pay project management fees and other costs to the Penang government, which will in turn be paid to PDC.
PLB will also deliver to the Penang state government a performance bond for an aggregate guaranteed sum being 5% of the estimated total cost of the rehabilitation works, with 50% in the form of a bank guarantee issued by a financial institution and 50% in the form of a corporate guarantee.
In turn, PLB will be entitled to 75% of the existing area and 70% of the additional area after rehabilitation, whereas the remaining 25% and 30% of the existing and additional areas, respectively, will go back to the Penang state government.
PLB plans to develop its entitled land into residential, commercial, and tourism developments with the state government’s approval.
“The project will enable PLB and its subsidiaries to undertake the rehabilitation works and in return, gain ownership of land for the development and construction of residential, commercial and tourism developments or projects within the proximity of Georgetown.
“Notwithstanding such proximity, the land is expected to be free from social and heritage restrictions for development and contribute positively to the group’s financial performance going forward,” said PLB.
PLB said it intends to fund the project by obtaining funding from the engineering, procurement and construction company that will serve as the main turnkey subcontractor for the project, or via external loan or bank borrowings, or a combination of both. The quantum is not currently determined.
The time for completion of the rehabilitation works is within five years from the unconditional date, while the construction works and operational commencement at the new integrated recycling centre is within three years from the JDA, with an extension of two years, if necessary.
The project is subject to shareholders’ approval at an extraordinary general meeting to be convened.
At 4.03pm, shares in PLB Engineering rose 3 sen or 2% to RM1.53, which translates into a market capitalisation of RM171.96 million for the company.
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