MTD Capital Bhd expects contribution from Indonesia's Cigading port by 2011
The coal terminal project at Cigading Port, Indonesia, to start contributing by 2011, says group managing director Datuk Azmil Khalid.
He said coal price was about US$130 a tonne currently from US$30 a year ago.
“We expect a strong turnover at the coal terminal, as global demand remains strong,” he told reporters during a media trip to Indonesia recently.
MTD, together with joint-venture partner PT Bintang Sinomast Ltd, owns PT Cigading International Bulk Terminal (CIBT), which was awarded the concession for the coal terminal.
Indonesia is currently the largest producer of coal in the world while countries in the European Union, as well as China and India, are the biggest users.
CIBT director Yusof Merican said Indonesia exported about 230 million to 250 million tonnes of coal annually.
Azmil said the Cigading Port facilitated the transport of coal in high volume but logistics and infrastructure were unable to handle the load.
“With the coal terminal, producers and suppliers would have certainty of coal availability,” he said.
The first phase of the terminal is expected to be completed in 2010 while the second and third would start construction in 24 to 36 months.
Azmil said the first phase, which would cost about US$40mil, had a capacity of 10 million tonnes.
The following two phases cost about US$60mil together and would add on another 30 million tonnes, he said, adding that the project would be funded via the debt market.
Yusof noted that the Indonesian authorities planned to make Cigading Port the second largest port in the country, after Tanjung Periuk Port.
This is the first port project undertaken by the group. “Cigading is an existing port and MTD is only managing a part of it, hence reducing our risk as well as giving us sufficient exposure to learn the business,” Azmil said.
Currently, the group's revenue is derived from toll roads (50%), construction (30%) and property development (20%).
Azmil said MTD was actively looking for port, power plant and toll road opportunities in Sri Lanka, the Philippines and Indonesia.
In Indonesia, the group also holds the concession for the Cibitung-Cilincin Toll Road. Yusof said discussions with the authorities on land acquisitions were likely to complete in 12 months.
Azmil said due to rising prices of building materials, the cost of construction for the highway had increased to some US$400mil from the initial estimate of US$270mil.
Once the land acquisition issue is resolved, the group plans to review the proposed toll rates to account for higher construction cost.
“It is a moving rate based on cost structure. There is risk of price volatility in the future,” he added.
Yusof said, however, risk of cost overrun could partly be cushioned by the fixed cost under mechanical and engineering works.
He said coal price was about US$130 a tonne currently from US$30 a year ago.
“We expect a strong turnover at the coal terminal, as global demand remains strong,” he told reporters during a media trip to Indonesia recently.
MTD, together with joint-venture partner PT Bintang Sinomast Ltd, owns PT Cigading International Bulk Terminal (CIBT), which was awarded the concession for the coal terminal.
Indonesia is currently the largest producer of coal in the world while countries in the European Union, as well as China and India, are the biggest users.
CIBT director Yusof Merican said Indonesia exported about 230 million to 250 million tonnes of coal annually.
Azmil said the Cigading Port facilitated the transport of coal in high volume but logistics and infrastructure were unable to handle the load.
“With the coal terminal, producers and suppliers would have certainty of coal availability,” he said.
The first phase of the terminal is expected to be completed in 2010 while the second and third would start construction in 24 to 36 months.
Azmil said the first phase, which would cost about US$40mil, had a capacity of 10 million tonnes.
The following two phases cost about US$60mil together and would add on another 30 million tonnes, he said, adding that the project would be funded via the debt market.
Yusof noted that the Indonesian authorities planned to make Cigading Port the second largest port in the country, after Tanjung Periuk Port.
This is the first port project undertaken by the group. “Cigading is an existing port and MTD is only managing a part of it, hence reducing our risk as well as giving us sufficient exposure to learn the business,” Azmil said.
Currently, the group's revenue is derived from toll roads (50%), construction (30%) and property development (20%).
Azmil said MTD was actively looking for port, power plant and toll road opportunities in Sri Lanka, the Philippines and Indonesia.
In Indonesia, the group also holds the concession for the Cibitung-Cilincin Toll Road. Yusof said discussions with the authorities on land acquisitions were likely to complete in 12 months.
Azmil said due to rising prices of building materials, the cost of construction for the highway had increased to some US$400mil from the initial estimate of US$270mil.
Once the land acquisition issue is resolved, the group plans to review the proposed toll rates to account for higher construction cost.
“It is a moving rate based on cost structure. There is risk of price volatility in the future,” he added.
Yusof said, however, risk of cost overrun could partly be cushioned by the fixed cost under mechanical and engineering works.