It is understood that the entire RM2.2bil project which was announced on Tuesday for the RoL project includes the total cost of land development and sales adjoining the Klang and Gombak rivers with a total stretch of 10.7km.
Thus, if the Ekovest-MRCB JV is successful in attaining the project, Ekovest Bhd which holds a 60% stake in the JV would be getting RM600mil worth of jobs while RM400mil worth will go to Malaysian Resources Corp Bhd (MRCB).
The Ekovest-MRCB JV was on Tuesday appointed the project delivery partner for the first phase of the RM2.2bil RoL project to transform the rivers running through the heart of Kuala Lumpur through river rehabilitation, beautification of riverbank and river corridor developments.
It is also understood that this project, if the Ekovest-MRCB venture were to eventually secure it, is expected to see Ekovest taking a front lead’s role given its majority stake in the JV.
Ekovest shares closed 4 sen higher to RM2.64 yesterday but with little volume traded of only 10,000 shares.
However, this project is likely to positively impact smaller-capitalised Ekovest more than MRCB should the Government decide to award the beautification works project to the Ekovest-MRCB JV.
At this stage, with the current appointments, the Ekovest-MRCB JV will earn a fee of RM22mil equivalent to 1% of the project value over the project period of three years, which is an insignificant amount of RM2.9mil per year to MRCB over the next three years.
RHB Research in a report yesterday said it expected the formal awarding of the contract for the beautification works and the physical works of this project to only start next year.
Analysts are positive on the project and RHB Research had rated MRCB a “trading buy” with a target price of RM2.55 while Hong Leong Investment Bank had a target price of RM2.22 on the stock.
By The Star
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