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However, in the medium-term the division remains upbeat
on the Vietnamproperty market. From a macro perspective,
the World Bank is anticipating an economic revival of
the Vietnamese economy this year with a projected GDP
growth of 5.3%. Moreover, Aeon of Japan is completing
the construction of its retail mall at Celadon City, which
is expected to open by year end, while an international
school operator is scheduled to relocate its campus to
Gamuda City. These events, we are confident, could spur
buying interest in our properties.
The property division received a boost in the first quarter
of 2013, with its acquisition of two parcels of land in
the Klang Valley - 724 acres at Serai and 89 acres at
Kundang, which is expected to generate GDV of RM5.2
billion. Strategically located, and within a fast maturing
area of Selangor, this new land bank offers positive
prospects for mixed property development.
Situated about 11km south of Rawang, these new land
parcels are located within the vicinity of the Rawang South
Interchange of the North-South Expressway, which connects
to the Guthrie Corridor Expressway and Latar Highway.
These land parcels could prove to be yet another premier
residential and commercial enclave like our successful
integrated townships at Kota Kemuning, Bandar Botanic
and Horizon Hills. The new land parcels also offer fast and
convenient access to the upcoming KVMRT rail network.
The property division plans to acquire more new land
banks in the near future and has set aside up to RM1
billion a year, over the next few years, for this purpose.
Infrastructure Concessions
Earnings from the Infrastructure Concessions division
remains consistent as per the previous year at RM271.4
million, accounting for 39% of the Group’s pre-tax profit.
Both expressways and water concession businesses
experienced steady growth as both tollable traffic at our
expressways and the volume of potable water processed
at our water treatment plants continue to chart a steady
uptrend.
Prospects of resolving the Selangor water industry
restructuring issue looks promising especially with
the conclusion of GE13. Both the Federal and State
Governments have renewed their commitment to resolve
this long standing problem, with reports in the second
quarter of 2013 of the Prime Minister having written
to the Selangor Chief Minister agreeing in principle
to the State Government acquiring all four water
concessionaires in the State. Both Governments are now
in the midst of negotiations to agree on the terms of the
overall restructuring of the industry, including matters
relating to the new Langat 2 water treatment plant
project. They have set themselves a target to resolve all
remaining issues by the end of December 2013.
Prospects for Financial Year 2014
Prospects are significantly brighter and clearer post-
election 2013. Notwithstanding the reprioritising and
resequencing of large-scale infrastructure projects due to
fiscal constraints, the Government has taken the decision
to proceed with the implementation of KVMRT Line 2 and
3. Indeed, this is expected to keep the Company busy and
sustain growth in the construction sector over the next
decade.
In the coming few years, earnings and activity will be
underpinned by greater construction progress in KVMRT,
SBK Line. Meanwhile, KVMRT Line 2 is expected to be
approved in the imminent future and significant works
should be visible by 2016.
Beyond the KVMRT project, the Government has shown
great commitment in developing rail infrastructure. We
understand that the Government will continue to expand
012
Performance
Review
Gamuda Berhad (29579-T)
Annual Report 2013