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HSL: Miri wastewater job moving ahead of schedule

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KUCHING: Hock Seng Lee Bhd’s (HSL) RM333 million Miri wastewater project is progressing ahead of schedule, according to its chairman Datuk Idris Buang.

With tunnelling works for the project about 45 percent completed, he said the project is targeting a mid-2021 completion.

To recap, HSL was awarded the project in March-2017, with contract period of 48 months. The project involves earthworks, construction and commissioning of the wastewater treatment plant, sewer networks, intermediate pump station, including associated works and property connections.

HSL is also currently undertaking the Kuching wastewater project (package 2), which has  achieved about 15 percent in physical works, including tunnel boring.   

The package 2 contract worth RM750 million was awarded to HSL’s 75 percent-owned consortium, also in March 2016. The project is expected to be completed and commissioned in six years.

According to the company, the package will add another 100,000 PE (population equivalent) to the current system and duplicate the existing sewage treatment plant.

The completion date, including all the property connection works, is expected to be end-2023.

The Kuching wastewater project (package 1) was completed in early 2015 with a contract value of about RM530 million.

“Both of the sewerage tunnelling projects are expected to lead to further opportunities.

“Sarawak cities are lacking in centralised waste water management and will eventually all need to move to underground piping networks that culminate at proper treatment plants. 

“Our comprehensive tunnel boring fleet is an important strategic asset,’ HSL said in its 2018 annual report released yesterday.

Idris, in his message to shareholders in the report, said the Pan Borneo Highway project’s work package that HSL and Dhaya Maju Infrastructure (Asia) Sdn Bhd are implementing has progressed to premixing works.

The RM1.6 billion work package covers Bintangor to Julau (28km), Durin Bridge (1.9km) and Sibu interchange to Sungai Gua Bridge (46km).

“The multiplier effects of the Pan Borneo highway (project) will soon be felt. Contracts, such as those for the many kilometres of guard rails along the highway, are already being tendered out,” said Idris.

He said although HSL group had substantial order book of RM2.9 billion as of Dec 31, 2018, the group would still bid selectively for projects which align with its specialist marine and civil engineering capabilities.

Last week, HSL secured another major contract – the Batang Paloh bridge project in Mukah under package 3 of the Sarawak coastal road upgrading, which is worth RM298.98 million.

On the group’s property development business, Idris said it had continued to perform creditably, with stable margins being achieved.

“However, there has been some softening of the market as interest rates rise to control inflationary pressures.

“The (property) team will have to ramp up their marketing efforts this year to clear remaining stocks,” said Idris.

He said HSL would move into its new office tower at its flagship La Promenade along Kuching-Samarahan Expressway this year.

According to the company, HSL completed about RM92 million worth of property projects in 2018, comprising mostly the Eden Commercial Centre shophouses as well as industrial buildings for Vista Industrial Park (VIP) Block 1.

Presently, there is RM240 million worth of property projects on going. These are Vista Industrial Park VIP Block 3 and the residential developments of La Promenade’s Precinct Luxe Phase 2 and Highfields Phase 3A.

Idris said HSL recorded group revenue of RM610.4 million in financial year ended Dec 31, 2018, surpassing RM420 million in 2017 (restated in line with new accounting policies). The group pre-tax profit rose to RM72.2 million, up from RM64.1 million (restated) in 2017.

“The upward trend in our financial outcomes has continued which is particularly pleasing given the economic downturn.

“(Profit) margins are also recovering and well into the double digits while gearing has been modest,” he said.

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