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KUALA LUMPUR: Sime Darby Bhd yesterday denied an allegation made in a blog that the conglomerate had been hit by cost overruns of RM800mil on an oil and gas engineering project in Qatar.

President and group chief executive Datuk Seri Ahmad Zubir Murshid said: “There’s no such thing as the RM800mil losses. In our last quarterly results, we had not stated any (such overruns). Whatever provisions needed, we had already made in the previous quarter, and that stands until today.”

In a posting on Monday, the Sime Darby Watch blog claimed that Sime Darby Engineering Sdn Bhd had incurred the overruns from a contract to build and install a process platform, a utility platform and three bridges off the coast of Qatar.

Maersk Oil Qatar awarded the job, worth about RM2.1bil, in February 2007. Ahmad Zubir said the installation work for the project was 95% completed and the target was to finish by end-March.

“Yes, there are variation orders because of design changes. Some of these orders have been approved and some are still being negotiated. How can somebody say we have lost RM800mil when the project has not been completed yet?” he asked.

He was speaking to reporters during a briefing on two Sime Darby projects in Perak that Prime Minister Datuk Seri Abdullah Ahmad Badawi will visit tomorrow.

This is the second time that Sime Darby has been compelled to refute talk of huge cost overruns on the Qatar project.

In April last year, it issued a statement following media reports that there had been overruns of RM120mil to RM150mil.

On the recent news that the Government was not in favour of AirAsia Bhd’s plan to have a new low-cost carrier terminal (LCCT) on Sime Darby’s land in Labu, Negri Sembilan, Ahmad Zubir said it would not affect Sime Darby’s Vision Valley project, which covers 80,000 acres in Selangor and Negri Sembilan.

He pointed out that the project would still benefit if the new LCCT was located near the KL International Airport (KLIA) in Sepang.

“It doesn’t matter where the airport is as long as it’s in an area where we have land. If the Government has decided that the LCCT will not be in Labu but in KLIA, we are okay. That was our original plan – to develop Sepang Estate as an aeropolis. Our Vision Valley does not change,” he added.

According to reports on Saturday that quoted sources, the Government had turned down AirAsia’s proposal to build a RM1.6bil airport in Labu.

Instead, Malaysia Airports Holdings Bhd (MAHB) will build the new LCCT near the present terminal at KLIA.

This was said to be the outcome of a Jan 30 meeting chaired by Deputy Prime Minister and Finance Minister Datuk Seri Najib Tun Razak, and attended by AirAsia, the Finance Ministry and MAHB.


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