PETALING JAYA: Kumpulan Powernet Bhd (KPower) has bagged a RM354 million job from Kangsar Hidro Sdn Bhd to undertake, amongst others, the preliminary study, design, supply, construction, commissioning and completion of five mini hydropower plants with total capacity of 32.47MW, all in Perak.
Kangsar Hidro is a joint venture entity between Yayasan Perak, a Perak state agency and Kangsar Capital Sdn Bhd, a wholly owned subsidiary of OHP Ventures Sdn Bhd, which was established to undertake the development of the project. Currently, Yayasan Perak and Kangsar Capital own 15% and 85% equity interest in Kangsar Hidro respectively.
Kangsar Hidro and the company will enter into a definitive agreement within 60 business days.
KPower said the scope of work includes the preliminary study, engineering, construction, supervision, testing, commission, reliability test, remedy of defect during the defect liability period and provision of all equipment, both permanent works and temporary works in connection with the project. The company will also be responsible to undertake the corresponding mobilisation and preliminary cost in relation to the works.
“The company will complete all the works so as to achieve the target completion date within 48 months from the commencement date or Dec 24, 2024, whichever is earlier,“ KPower said in a stock exchange filing today.
The company will provide an on-demand bank guarantee from a bank in an amount equal to 5% of the contract price (performance bond) substantially for the due observance and performance by the company. The performance bond will remain in full force until the company has provide an on-demand bank guarantee from a bank in an amount equal to 10% of the contract price (warranty bond).
The company will provide a design guarantee to Kangsar Hidro, energy output performance guarantee in relation to the net energy output and completion guarantee that the works will be completed within the period and will meet in all respect the requirements.
In the event that the company fails to achieve the completion guarantee, the company will pay or allow Kangsar Hidro liquidated and ascertained damages (delay LDs) equal to RM260,000 for each day or part day.
In the event that the company fails to achieve the design guarantee and/or energy output performance guarantee, or fails to achieve the performance ratio under the energy output performance guarantees, the company will pay the amount of delay LDs.
“The award is expected to contribute positively to the net assets, consolidated earnings and earnings per share of the company for the financial year ending June 30, 2020 to June 30, 2025,“ KPower said.
The board anticipates that KPower’s foray into the provision of construction-related services from the fulfilment of the award will in future, result in a diversion of 25% or more of the net assets of KPower and/or will contribute 25% or more to the net profits of KPower.
“As such, the board will make the necessary announcement and seek its shareholders’ approval on the diversification of its operations at an EGM to be convened in due course.”
The award constitutes a recurrent related party transaction due to the relationships of KPower directors and its group of companies with Kangsar Hidro.
