Scomi Engi-neering Bhd is in the final stages of sealing a deal for a monorail job in China and is targeting more monorail projects in other countries, according to sources.

“Scomi Engineering’s team has been in China since the beginning of the year and is looking at projects in third-tier cities in the country,” a source said, adding that Scomi Engineering could be partnering with a local partner for its monorail project in China.

The infrastructure boom in China has spilled over to the republic’s third and fourth-tier cities that have a population of about three million people. These cities, it is believed, are ripe for monorail systems, as there is little chance of larger metro systems being built by them.

According to Scomi Engineering’s recent annual report, policy updates in China have been in favour of the monorail. It said there could be potentially 2,800km of new monorail lines in the republic.

Competition for China’s monorail projects is expected to be stiff, coming from China-based new energy vehicle maker BYD Co as well as Scomi Engineering’s main rivals such as Japan’s Hitachi Ltd and Canada’s Bombardier Inc.

Scomi Engineering, which has won contracts in Brazil and India for its monorail system, is on the lookout for more jobs abroad and has tendered for a total of RM3.3bil worth of work, including monorail projects in countries such as Thailand and Turkey. Scomi Engineering’s order book stands at RM1.9bil, consisting mainly of monorail jobs in India and Brazil.

For the financial year ended March 31, 2017 (FY17), revenue for its Malaysian operations fell more than half to RM51.59mil from a year earlier, while revenue from India and Brazil grew 68% and 80%, respectively.

It is also understood that the company has received an extension to its operations and maintenance services for the Mumbai Monorail in India at a revised rate for another three years.

The company is currently working on Phase 2 of the Mumbai Monorail spanning over 10.76km, which it expects to complete in the second half of next year.

On Scomi Engineering’s jobs in Brazil, the company expects to complete all construction activities by 2019.

In 2011, it clinched a contract worth RM2.6bil with consortium partners to build a monorail line for Line 17-Gold in Sao Paulo, Brazil, following an international competitive tender process.

In July 2014, it was awarded a contract to develop and maintain the Sao Paulo Line 18 monorail project.

In FY17, Scomi Engineering saw its net loss widen to RM19.76mil from RM1.84mil in FY16 due to reversing certain claims, which had been recognised previously, unrealised foreign-exchange losses, lower work done in the rail segment and lower sales in the commercial vehicle segment.

The group’s independent auditor has also raised doubts about its ability to continue as a business because of the legal case with client Prasarana Malaysia Bhd, but a source said the opinion is basically the same from last year.

The source said the independent auditor’s opinion on Scomi Engineering’s FY17 financial report was not new because it has not changed from FY16. “It was addressing the same opinion in a different way, as the requirement for reporting had changed effective Dec 15, 2016,” the source said,

The source added that Scomi Engineering was looking at the possibility of restructuring its current debt. As at March 31, the company had total borrowings of RM525mil.

Source:
courtesy of THE STAR

by INTAN FARHANA ZAINUL

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