Melati eyes flood mitigation works

MELATI Ehsan Holdings Bhd, a construction and property firm, believes it has what it takes to be one of the top players in flood mitigation.

The company, which has one flood mitigation project in hand, has bid for three more deals worth RM2.1 billion collectively in the south and north of Peninsular Malaysia, managing director Datuk Yap Suan Chee said.

"We are confident about getting one of the three contracts after the mid-term review due to our financial strength and also because of what we have achieved in Kepala Batas, Penang," Yap told Business Times in an interview in Kuala Lumpur.

The government has doubled its budget for projects to tackle flooding to RM4 billion under its latest five-year plan that ends in 2010.

But it will need five times more to end the problem completely. In December last year, Drainage and Irrigation Department director-general Datuk Keizrul Abdullah said that RM21 billion would be needed for such nationwide projects.

"More emphasis has been placed on flood mitigation to tackle flooding problems, especially in growth corridors," Yap said.

Melati won a RM170 million contract for works from Bertam to Kepala Batas in December 2004, which was its first flood mitigation work.

The main job, which started in February 2006 and is 40 per cent complete, includes widening and stabilising five rivers and constructing new drainage, maintenance complex and flood retention pond. Works will be done by April next year.

Melati's edge also lies in its "green products".

Project director Mohd Zainudin Badarudin explained that instead of reinforcing river banks with concrete, a common practice in the past, Melati uses "sand-filled mattress" and "turf reinforced matrix".

These use natural materials like coconut fibres or bio-degradable equivalent material, which allow and promote growth of vegetation.

"In addition, substantial savings in time can be achieved as no specialised equipment or additional machinery need to be deployed," Mohd Zainudin said.

Melati is also geared for more jobs, said Yap. It plans to submit bids for highway and building works as well as infrastructure projects in township developments.

The main board-listed group is targeting contracts worth more than RM300 million each, with the focus on those under the Ninth Malaysia Plan and Private Finance Initiatives.

"We are also looking at dam construction, which will be our first initiative. We have a good management team and strong network of sub-contractors, good cash flow and bankers' support to tackle the job. So we are confident and ready," Yap said.

Melati has RM1.7 billion worth of contracts in hand, of which RM1.4 billion is unbilled.

More than 80 per cent are government projects, from Selangor Economic Development Corp and TPPT Sdn Bhd, a unit of Bank Negara Malaysia.

Melati has contracts for the Trans Eastern Kedah Interland Highway project and a job to build a Carrefour hypermarket in Kota Damansara, Selangor.

"We have completed 60 per cent of the highway and are targeting to finish the job by year-end, five months ahead of schedule," Yap said.

Construction contributes 70 per cent of group revenue, while property development makes up the rest.

By New Straits Times - Business Times (by Sharen Kaur and Goh Thean Eu)