With each overseas project, we are gaining recognition on the international map to further grow the Group's credentials as a leading construction company. Not to mention, the further enhancement of our order book.
For the financial year ended 31 March 2010, ECU’s main priority was to ensure timely completion of projects as per the agreed milestones and to implement measures to stem further losses arising from project delays and cost overruns.
With the rising material prices and the sluggish economic conditions in the key markets we operate in such as the Middle East, this was an uphill task. However, ECU has been successful to a large degree in achieving these objectives.
In the UAE, our key projects are Meena Plaza and Al-Reem Island in Abu Dhabi; and Sidra Tower in Dubai.
Meena Plaza is a mixed development project and is ECU’s single biggest commercial project with a revised contract amount of AED 948 million.
The current physical progress of work is at 27%. We had to reduce the rate of progress as a result of the irregular payments and substantial outstanding payments from the client since December 2009.
However, we are currently in discussion with the client to regularise all outstanding payments and expect to successfully complete and handover the project as per the revised milestone date of August 2011.
We are involved in the Al-Reem Island project via a consortium which comprises IJM Construction Sdn. Bhd., Sunway Builders Sdn. Bhd., LFE Engineering Sdn. Bhd. and Zelan Holdings (M) Sdn. Bhd. The project consists of 5 residential towers and 7 luxury villas; which at present, is 98% completed. The second plot of Al-Reem – the three storey shopping mall and a two storey yacht club is 68% in progress. The total project’s value is approximately AED 2 billion.
We handed over Sidra Tower, an AED 317 million project located in the UAE, in December 2009. Sidra Tower is a 45-storey mixed development of suites, hotel apartments, offices and commercial retail space.
The completion of this project has helped to elevate our brand in the UAE and on the back of our good work here, we hope to secure new projects in the UAE, when the opportunity arises.
In the implementan ion of the Shuqaiq II Independent Water and Power Plant (IWPP) in the Kingdom of Saudi Arabia, where we undertake the civil construction portion of works, both onshore and offshore, we have encountered many unforeseen challenges. We are currently working with the project owner and the main contractor to resolve the various issues.
All the same, we are moving forward towards full project completion and handing over – expected to be in December 2010. At present, we have completed most of the works according to the contract schedule.
In Indonesia, we have worked tirelessly to resolve the many issues affecting our Rembang Power Plant project. We have achieved several key milestones such as First Oil Firing and Steam Blow for Unit 20. We are making headway in our efforts to bring Rembang to operational status.
The experiences gained have improved our capabilities. We have scaled the steep learning curve of handling full EPC jobs, which will be useful for future bids.
With the know-how gained and the lessons learnt from the year under review, ECU will exercise prudence and undertake all necessary due diligence prior to bidding for future contracts. Notably, close attention will be paid towards the complexity and technical aspects of projects; to ensure we are fully capable of undertaking such jobs.
ECU will also look into incorporating better vendor management systems to ensure only quality vendors and contractors are selected for sub-contracting work. We will focus on projects on a cost plus basis to avoid the issue of cost overruns due to escalating material prices.
At the same time, we are exploring opportunities under the public-private partnership (PPP) initiative under the Tenth Malaysia Plan (10th MP).
