MRCB confirmed its exit from the Berjaya-led consortium through a filing to the Bursa on Thursday, a day after Berjaya Rail told the media that MRCB had pulled out.
Kuala Lumpur: The bid for the Kuala Lumpur-Singapore High-Speed Rail project, the most keenly-watched mega project in the country now, has drawn even more intense interest - and speculation - after MRCB confirmed that it has pulled out from one of the two consortiums eyeing for the project.
MRCB confirmed its exit from the Berjaya-led consortium through a filing to the Bursa on Thursday, a day after Berjaya Rail told the media that MRCB had pulled out.
Vincent Tan, the Berjaya Corp founder, in the statement on Wednesday said “MRCB has decided to withdraw from the consortium to pursue other strategic opportunities and hence, would no longer be part of the (Berjaya-led) KL-SG HSR Consortium”.
And “strategic”, ironically, is exactly how analysts are now viewing MRCB’s decision to pull out from the Berjaya-led consortium.
They said MRCB’s decision to terminate the non binding agreement with Berjaya Rail is also a “responsible” one given the massive financial risks the HSR might expose its shareholders, especially EPF, KWAP and Tabung Haji.
MRCB is on good financial standing with a AA-IS financial rating; therefore, it does not make sense for it to try and be an asset owner, which will require a huge financial commitment, according to the analysts.
As a government-linked company and a public listed entity that boasts of the EPF as its majority shareholder as well as KWAP and Tabung Haji, MRCB has the responsibility to protect their interest as well.
“MRCB should stick to what it does best, that is infrastructure, and that’s exactly what they will be doing by withdrawing from the Berjaya-led consortium,” one analyst said.
In the same Wednesday statement to the media, Vincent Tan saide: “We remain steadfast in our mission to deliver a world-class HSR system that will transform regional connectivity and economic development for Malaysia and to help the nation’s successful transition towards green mobility in the form of the high-speed rail.”
The current talk, however, is that the other consortium eyeing the HSR project, which is led by YTL and SIPP, a company claiming to have close ties to the Johor palace, is leading the race.
It is also a well-known fact that Prime Minister Datuk Seri Anwar Ibrahim is not a fan of mega projects. So while Transport Minister Anthony Loke has said that the Cabinet will make a policy decision on the HSR by the end of this month or in January, prior to talks with Singapore, he will have a massive task convincing his boss the Prime Minister.
Should Putrajaya give the go-ahead for the multi-billion ringgit project, MRCB is well poised to still benefit from HSR jobs due to the requirement of 30 per cent Bumiputera participation in Government infrastructure projects, the analysts said.
In this respect, MRCB’s withdrawal from the Berjaya-led consortium not only protects its shareholders and contributors (especially EPF, TH and KWAP) from major financial risks but virtually guarantees its participation and benefit from HSR contracts and sub-contracts, they said.
MRCB has extensive rail experience with the LRT3 construction, MRT 2 packages and managing the KL Sentral station. It has also been announced that MRCB will be the main developer of the major upgrade of KL Sentral.
