KUALA LUMPUR: Pipe-maker JAKS Resources Bhd has bagged a contract from China Power Engineering Consulting Group Co Ltd (CPECC) and Golden Keel Holdings Ltd (GKHL) to build a US$1.87bil (RM7.05bil) power plant in Hai Duong province in Vietnam.
In a statement yesterday, JAKS said its 50%-owned subsidiary, JAKS Power Pacific Ltd (JPP), would expedite the project via a joint-venture company (JV Co), JAKS Hai Duong Power Co Ltd.
This will see the JV Co carrying out engineering, procurement and construction (EPC) works worth US$1.52bil (RM5.72bil) under two different contracts that include Southwest Electric Power Design Institute Co Ltd and CPECC under EPC contract 1 and another with GHKL, a unit of JAKS under EPC contract 2.
“We are truly pleased that JAKS Hai Duong Power has reached another milestone for this project with the award and execution of the EPC contracts.
“We believe stakeholders will take comfort in the award of EPC contract 1 to the CPECC-led consortium,” said JAKS chairman Tan Sri Hussin Ismail.
He said the company was excited with JAKS’ vital role in the civil, mechanical and electrical engineering works via the award of the EPC contract 2.
“We have been developing and strengthening our in-house infrastructure construction capabilities through the years, and this contract will further enhance our position as a significant construction player,” he added.
JAKS’ outstanding orderbook now stands at RM2.44bil with the new RM1.72bil contract secured, said Hussin, adding that it would ensure the smooth execution and delivery of these contracts, as well as looking out for other infrastructure projects.
JAKS had signed several deals with CPECC last month to facilitate a proposed JV for the design, EPC, financing and operations of two 600MW coal-fired thermal power-generation units that would begin construction in the first half of 2016, with operations to begin in 2020.
The concession will be for over 25 years on a build-operate-transfer (BOT) basis, and after the term expires, the JV Co would transfer the power facility with the attached assets to the Vietnamese Government at no charge.
Meanwhile, the JV Co has also signed a power purchase agreement with Vietnam Electricity and a coal supply agreement with the Vietnam National Coal-Mineral Industries Group for the duration of the BOT period.
The project would be funded on a 75:25 debt-to-equity structure and involve an equity commitment of US$140.1mil (RM528.8mil) from JAKS, to be met via a combination of both internal and bank borrowings, it said.
It has been reported that the company would see more than US$150mil (RM571.15mil) in annual recurring revenues, apart from recognising a bottom-line performance from this venture.
