Malaysia’s Salcon to build Ambatale Storm Water Pump Station for Rs. 2.8 Bn

July, 17, 2018

Malaysia's Salcon Engineering Berhad, a wholly-owned subsidiary of leading water and wastewater engineering company in Asia - Salcon Berhad has won a contract worth over Rs. 2.8 billion or Malaysian Ringgit (RM) 71.27 million (US $ 17 million) to build a storm water pumping station in Sri Lanka over a period less than two years. Duration of the Project is 21 months from the date of commencement and the Project is a construction contract and has no option for renewal, the company further disclosed, in a market disclosure with the Malaysia’s capital market - Bursa Malaysia.

The purpose of establishing a pumping station is to pump out water during high water levels in Kelani River and high rainfall in the areas upstream of Madiwela East Diversion Canal. The proposed pumping station is expected to enhance the conveyance capacity to reduce the flood risk to the Colombo catchment, especially to Parliament Lake and surrounding area while minimizing the environmental impact from the proposed improvements while maintaining a sustainable environment.

The project is contracted for USD 6.85 million (equivalent to RM27.67 million) and nearly Rs. 1.718 billion (equivalent to RM 43.60 million) totaling equivalent to approximately RM 71.27 million (including relevant taxes and duties and VAT).

Disclosure by Salcon to Malaysia’s capital market - Bursa Malaysia further said that the company on 16th July 2018 accepted the Letter of Acceptance dated issued by Sri Lanka's Ministry of Megapolis & Western Development to design and build Ambatale Storm Water Pumping Station. According to the company’s disclosure the Project is expected to contribute positively towards the earnings and net assets of Salcon Group for the financial years ending 31 December 2018, 31 December 2019 and 31 December 2020. Salcon does not foresee any exceptional risks other than execution risks associated with the Project.

- Reporting by Devendra Francis