Business

Friday March 16, 2007

Nadicorp signs US$77m finance deal for CNG buses

By Sabry Tahir



SHAH ALAM: Bus service operator Nadicorp Holdings Sdn Bhd has signed a seven-year US$77mil financial agreement with Samsung Corp to purchase 465 compressed natural gas (CNG)-powered buses, pioneering the use of the liquid for commercial bus operations.

Nadicorp executive chairman Datuk Mohd Nadzmi Salleh said that under the agreement, Samsung would, apart from being a technology partner and CNG chassis provider, be arranging and sourcing US$50mil from Korean banks as well as US$27mil from local banks to buy CNG bus chassis.

Nadicorp is also seeking to partly use the funds to initiate an electronic ticketing system as well as manufacture CNG buses via its coach-building subsidiary, Badanbas Sdn Bhd.

“We will be buying 100 buses this year,” he said after the CNG Bus Supply and Financing Arrangement signing ceremony yesterday.

He said the project had to be implemented in stages due to insufficient CNG refuelling infrastructure.

Nadzmi said diesel price had risen 120% from 2004 and bus operators like Nadicorp were forced to shoulder the burden as they were not allowed to increase bus fare.

“We incurred RM50mil higher operating costs last year alone,” he said.

The signing with Samsung, he said, followed the success of a joint pilot test and last year's delivery of 51 CNG buses to Perbadanan Putrajaya by Badanbas via a RM30mil supply contract.

“The price of CNG is half that of diesel. Our pilot test revealed that we are able to save up 24% in fuel costs (compared with the use of diesel) to remain competitive,'' he said.

Fuel made up 30% of the company's operating costs, he added.

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