Thursday November 8, 2012
Sime JV wins RM3.5b job
PETALING JAYA: Sime Darby Bhd has entered into a joint venture which in turn has signed concession agreements worth RM3.54bil with the Government to build and maintain new campuses for four institutions of higher learning at the Pagoh Education Hub in Muar, Johor.
The conglomerate said the 60%-owned joint-venture company, Sime Darby Property Selatan Sdn Bhd, will build campus facilities on a private finance initiative basis for Pagoh Polytechnic, Universiti Tun Hussein Onn Malaysia, International Islamic University Malaysia and Universiti Teknologi Malaysia.
It also said its indirect wholly-owned subsidiary Sime Darby Pagoh Development Sdn Bhd has proposed to sell five parcels of leasehold land measuring 506.07 acres in Pagoh, Muar, to Pesuruhjaya Tanah Persekutuan for RM50.6mil cash.
The Pagoh Education Hub would be developed on the land by Sime Darby Property Selatan. As at Oct 31, 2012, the net book value of the land is RM18.4mil.
Sime Darby told Bursa Malaysia that the construction cost of the campuses was RM992.6mil including the supply of teaching equipment.
The conglomerate said its portion of capital contribution to the joint venture would be funded via internal funds or external borrowings.
Under the build-lease-maintain-transfer deals and concession agreements, the campuses will be built over three years and subsequently leased to the Government and institutions of higher learning for 20 years.
Sime Darby Property Selatan would be paid RM156.9mil for the agreed teaching equipment cost over the first five years of the 20-year lease period.
The joint-venture company would also be paid availability charges of RM2.62bil and asset management services charges of RM764.5mil over the lease period.
Sime Darby said the deals were in line with the existing core business segments of the group, which include plantation, property, industrial, motors, energy and utilities, and healthcare.
“The concession agreements are expected to generate a stable stream of cashflows and contribute positively to group earnings in the future,” it added.