NS Water Konsortium Sdn Bhd awarded an exclusive contract to another Malaysian company Zecon Engineering Bhd, based in Sarawak, for the design and construction of the Negri Sembilan water supply project.
Zecon signed a memorandum of agreement (MoA) with NS Water on November 17 for the privatisation project, which is estimated at US$ 1 billion and covers the entire design and construction of the scheme as was outlined in the latter's concession agreement with the state.
NS Water and the Negri government are currently finalising details on the 30-year concession agreement, which would require the company to source development and water treatment plant works, develop and upgrade the state water distribution system, and implement a non-revenue water reduction programme and rehabilitation works.
Zecon and NS Water will finalise an engineering, procurement and construction contract (EPC) within three months after the execution of the concession agreement.
The MoA also requires NS Water to execute a valid and binding concession agreement with the state government of Negri Sembilan within six months. However, the parties could agree on an extension should the concession agreement not be settled by then.
NS Water is currently undertaking a reverse takeover of Sarawak Concrete Industries Bhd (SCIB). Under the proposal announced recently, SCIB is to buy Eurologic Sdn Bhd, which has a 65% stake in NS Water.
The 17 November announcement also confirmed the relationship between Zecon and SCIB through Zainal Abidin Ahmad, who is the Zecon group managing director and chief executive officer as well as the SCIB managing director and substantial shareholder.
In addition, Zecon executive director Zainurin Ahmad and SCIB executive director Zaidi Ahmad, are brothers of Zainal. Analysts said the award to Zecon would likely transform the company from a medium-sized Sarawak construction firm into a major player in the country. It also strengthens the link among the major shareholders of SCIB and Zecon.
