Good stake in Second Penang Bridge project

Malaysia has obtained a good equity stake of 49% in the joint-venture CHEC-UEMC Consortium, despite receiving a substantial loan of US$800mil from China.


An artist's impression of the 23km second Penang Bridge

The CHEC-UEMC Consortium is formed by China Harbour Engineering Company Ltd (CHEC) and UEM Group to build the Second Penang Bridge.

CHEC information division manager Ma Jie said this was due to the strong bilateral-relationship between China and Malaysia that had lasted more than 600 years.

“China would usually want to hold on to an 80% or 90% stake in the joint-venture company when it gave out such a substantial loan but because of the relations, China is agreeable to Malaysia holding a 49% stake,” he said.

Ma said the 3% interest charged by China and the 20-year repayment period was also a special deal for Malaysia.

“If UEM Group had gone elsewhere to obtain the loan, the interest rate would be between 5% and 6%.

“In short, Malaysia's cost to build the bridge drops significantly, due to the loan from China,” he added.

Ma said CHEC would also consider collaborating with UEM to work on infrastructure projects in African and Middle-Eastern countries.

“CHEC does not build only bridges. It also has the expertise in highways and airports.

“Presently CHEC has infrastructure projects in the Middle East, while UEM is undertaking similar projects in Qatar,” he added.

By joining with CHEC, a Fortune 500 company, UEM is bringing in one of the world's leading bridge builders to construct the second link in Penang.

“CHEC is now constructing the 32.4km Sutong Bridge, which is the world's longest cable-stay bridge, connecting Suzhou and Nantong.

“The project is scheduled for completion at the end of 2008. In December 2005, CHEC completed the 32.5km Donghai Bridge, the world's second longest bridge, connecting Shanghai and Yangshan Deepwater Port,” he said.

On constructing Penang’s 23km second bridge, Ma said CHEC would use environmentally friendly pre-fabricated pile foundation and pre-fabricated assembly pack technology.

“A pre-fabrication yard would be built in Penang to manufacture 294 piers and 9,364 sections for the bridge. It would take a year to produce the pre-fabricated parts and about 24 months to join them. The bridge, with the ability to withstand a 7 Richter scale earthquake, will have a 100-year life span. Over 80% of the raw materials used for the bridge will be sourced in Malaysia,” he said.

Ma said the bridge would have a dual two-lane carriageway with one motorcycle lane on each side. CHEC has over 100,000 employees worldwide, more than 60 offices overseas, and has a turnover of US$15bil last year.

Sources:
TheStar: Good stake in Second Penang Bridge project
http://star-space.com/news/story.asp?file=/2007/8/6/pnews/18488349&sec=pnews
CHEC Introduction
http://www.chec.bj.cn/ens/gsgk/zgjj/index.html
Sutong Bridge
http://www.roadtraffic-technology.com/projects/sutong/index.html