PLB to rope in CREC unit for Jelutong dumpsite rehabilitation in Penang

KUALA LUMPUR (March 20): Property developer and contractor PLB Engineering Bhd, who has secured a deal with the Penang state government to rehabilitate the Jelutong dumpsite in exchange for three-fourths of the rehabilitated land, plans to rope in the Malaysian unit of Chinese company China Railway Group Ltd to undertake the work.

In return, it will give up a portion of the land it is getting to China Railway Group's unit, China Railway Engineering Corp (M) Sdn Bhd (CRECM). China Railway Group is also known as CREC, which is the acronym of its predecessor as well as its parent company, China's state-owned China Railway Engineering Corp.

In a stock exchange filing, PLB said it has inked a Memorandum of Understanding with CRECM today to establish the basis of their cooperation, which entails the incorporation of a special purpose vehicle (SPV) that will be 51% owned by PLB and 49% by CRECM, to carry out the rehabilitation works as the main contractor. The management and operation of the SPV will be solely under CRECM.

In return, CRECM will get 90% of the land that PLB is entitled to under the conditional joint development agreement (JDA) that PLB inked with the state government just last month for the dumpsite rehabilitation.

Under the JDA, PLB will rehabilitate the 84-acre dumpsite, for which it will get 75% of the rehabilited land, and 70% of any additional area after the rehabilitation is completed. PLB will also build and operate a new integrated reycling centre there.

PLB said its MoU with CRECM is valid for eight months, during which the parties will negotiate exclusively and endeavour to enter into a legally binding agreement.

Shares in PLB closed up 9 sen or 8.5% at RM1.15, giving it a market capitalisation of RM122.6 million.

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