Muhibbah project in Qatar taking shape as planned
MD says firm is tendering for two more infrastructure jobs there
SHAH ALAM: Muhibbah Engineering (M) Bhd says its operations in Qatar are unlikely to be impacted by the tension between the country and its neighbours.
Managing director Mac Ngan Boon said the company’s road project in Qatar is ongoing as planned, with 20% of work completed.
In January, Muhibbah’s 49%owned associate Muhibbah Engineering Middle East LLC secured an RM438.2mil contract for the construction of roads and infrastructure works at the Um Alhoul Economic Zone (Qatar Economic Zone 3) in Doha.
The project is expected to be completed by the second quarter of 2018.
“There are a lot of things happening in Qatar. Opportunities are abundant, especially with the upcoming 2022 World Cup in the country,” Mac said after the company’s shareholders’ meeting.
In fact, he said, Muhibbah is tendering for two infrastructure jobs in Qatar.
“We hope to win at least one of the projects that we are now tendering for in Qatar,” he added.
Tensions in Qatar started early this month upon accusations that the country was supporting terrorism. Saudi Arabia, Egypt, the United Arab Emirates and Bahrain have decided to cut their ties with the country.
“I believe the issue in the Gulf states will be resolved soon. It’s just a matter of time,” Mac said.
Muhibbah’s outstanding order book stands at RM2.3bil, of which 60% is made up of non-oil and gas (O&G) jobs.
Its tender book is about RM4bil, which comprises projects from mainly the infrastructure sector such as the light rail transit and mass rapid transit systems as well as maintenance jobs in the O&G sector.
On the company’s O&G segment, Mac said Muhibbah’s fabrication yard is currently underutilised, with only a 10%-15% utilisation rate.
“Our fabrication yard is supporting our local and overseas jobs. It is part of the bigger Muhibbah operations,” Mac said.
“Many local fabricators are also experiencing low utilisation rates at their yards because fabrication jobs are tied up with the upstream sector.
“There has been a push by Petroliam Nasional Bhd (Petronas) to get the fabricators to consolidate. But at this juncture, it is hard to say it is going to happen,” he added.
At present, there are eight domestic fabricators licensed with Petronas, out of which six are listed on Bursa Malaysia.
The listed fabricators are Malaysia Marine and Heavy Engineering Holdings Bhd, Sapura Energy Bhd, TH Heavy Engineering Bhd, Boustead Heavy Industries Corp Bhd, KKB Engineering Bhd and Muhibbah.
O&G fabricators are principally involved in the business of manufacturing and assembling parts or structures for oil rigs or other related infrastructure.
Earlier this year, Petronas president and CEO Datuk Wan Zulkiflee Wan Ariffin said while there were eight such yards in Malaysia, Petronas’ requirements for the next few years would only be sufficient to cater to the optimum utilisation of two to three fabrication yards.