RM4bill Langat2 water treatment plant project

• Selangor Mentri Besar has promised to allow the Federal Government (FG) to build the Langat2 water treatment plant (WTP), part of the Pahang-Selangor Interstate Water Transfer Project (PSIWTP). Expected to be completed by 2014.
• Once written approval from the Selangor State Government (SSG) is obtained, the FG will tender out the contracts for the construction of the Langat2 WTP sometime in January or by end-February.
• Selangor water asset consolidation issue is now more likely to be resolved because the Langat2 WTP would be consolidated from four different water concessionaires to a sole entity in future.
• Who’s to build the plant. According to Business Times, 12 bidders had been shortlisted for the construction of Langat2 WTP. These companies include: 

1. Gamuda (BUY;TP RM4.78)-Biwater International, 
2. MMC-Salcon (BUY;TP RM0.80), 
3. Loh & Loh-UEM, 
4. WCT (BUY;TP RM3.66)-Sinohydro, 
5. LGB Engineering,
6. George Kent, 
7. Taliworks (BUY;TP RM1.60), 
8. LBH Group, 
9. Puncak Niaga (BUY; TP RM3.85),
10. IJM (Neutral: TP RM6.60), 
11. Kumpulan Perangsang Selangor, 
12. Hati Muda SB, Mewah Kota SB, Asia Baru Construction SB. 

• Size of the Langat 2 WTP at 1130MLD in capacity in the first phase, and with a total 1890MLD upon completion of the second phase.
• Expect a few names to be awarded distributed contracts. 
• Gamuda is likely to undertake the project because the company intends to focus its resources solely on the MRT project.

Utilities Winds of Change

The changes across the Utilities sector

Stepping on the gas. The biggest change affecting the sector is that more gas would soon be available in Peninsular Malaysia from the Liquefied Natural Gas (LNG) importation and regasification terminal in Melaka. This terminal will allow:

1. Petronas to import gas at market prices from international exporters.
2. Petronas to sell the gas bought at market price to Tenaga Nasional (TNB) for use in gas fired power plants.
3. TNB to be able to dispatch gas plants and also to agree to an extension of the 1st generation Independent Power Producer (IPP) Power Purchase Agreements (PPAs).
4. With the extension, the IPPs should be more willing to reduce their capacity payments now.
5. With the savings from the capacity payments, TNB should be able to afford gas at market price.
6. With TNB paying market price, Petronas will be willing to import more gas.
7. More gas will also be made available for Gas Malaysia, which can then sell the market priced gas to its customers, including those in the Rubber Glove industry.