KUB: JB Inter-city rail project yet to pass through investment committee

KUALA LUMPUR: KUB Malaysia Bhd's agreement with Malaysia Steel Works (KL) Bhd (Masteel) for the proposed Johor Baru inter-city rail transit system project is yet to pass through KUB's investment committee, which is now pending a new board.
KUB director Datuk Mohd Hafarizam Harun (pix), who is also on the board of the investment committee, said following the resignation of chairman Datuk Seri Abd Halim Abd Samad and director Gumuri Husaain, a new board will have to evaluate on the proposed project.
"We're still at the initial stage on this. With the new composition of the investment committee ... it (the committee) may have to re-look at it again. I can't safely say on that until we have our investment committee to discuss this," he told a press conference after its AGM here yesterday.
"All proposals will have to wait for the new chairman because he has to chair the board of investment committee. It is up to the two (KUB) majority shareholders (Umno via Gaya Edisi with a 29.6% stake and Ministry of Finance a 22% stake). They will have to collectively nominate one chairman," he added.
Hafarizam said the joint venture (JV) with Masteel for the proposed RM1.23 billion project that would complement the existing and upcoming transport network infrastructure in Iskandar remains at the investment committee stage and has not been brought up for consideration from the board of directors.
The controversial rail transit network project linking Iskandar Malaysia in Johor and Woodlands, Singapore is yet to take off since it was announced in 2011, pending approvals from certain agencies.
"The JV with Masteel is only at the level of an MoU (memorandum of understanding). It has not gone through the investment committee, which will look into the business proposal and if the business is viable, and if the profit margin mix meets our threshold, then it will be escalated."
He said the project will only take off once it has passed the investment committee stage and from there it goes to the board, followed by a proper JV agreement, deciding on the equity participation and business model.
"To say that it is not on is not correct, because we've got the MoU with Masteel but an MoU is not binding. But there is no JV agreement signed per se as of now," said Hafarizam.
Meanwhile, he said KUB has allocated a capital expenditure of RM64 million this year, mainly for the construction of its palm oil mill and for the improvement of its bottling facility for liquefied petroleum gas.
On its new iconic landmark KUB Tower, he said the group is looking to get the project development partner or development rights by year-end.
The construction of KUB Tower will take two years and it will have a gross development value of RM250 million.
He said KUB will also open five more A&W outlets in the remaining months of the year to reach a total of 10 outlets this year, with an investment of RM500,000 to RM700,000 per outlet.