Malaysia’s WCT Group wins big Qatar contract

The WCT Group has won its biggest deal since two years, a $323mn contract from Qatar-based Lusail Real Estate Development Company to build roads, five stations for the Lusail Light Rail Transit and two underground carparks.By Arno Maierbrugger/Gulf Times Correspondent/BangkokMalaysian engineering and construction company WCT Group, one of the largest of its kind in the country and best-known for the construction of Formula One race tracks in Malaysia and in the Middle East, won its biggest deal since two years, a $323mn contract from Qatar-based Lusail Real Estate Development Company to build roads, five stations for the Lusail Light Rail Transit and two underground carparks, according to an announcement to the stock exchange in Kuala Lumpur on March 10.The project has been jointly awarded to WCT and Qatar-based Al Ali Projects Company, a joint venture in which WCT holds 70%. Thus, it expects a revenue share of $226mn from the deal, the announcement said. The projects are expected to be completed in the second quarter of 2017.For WCT, which operates an office in Doha, the deal comes as a relief because over the past two years there was not much business for the group in the Gulf. Although the company earlier had secured quite a number projects in the Middle East, most of its latest announcements had to do with either project cancellation or legal disputes.There have been troubles in Bahrain, where a WCT joint venture project for works on the Dukhan Highway in Qatar was delayed and ended in arbitration, in Oman, where a $270mn contract for the construction of the Batinah Expressway, one of the biggest road projects ever in the country, was cancelled, and in the UAE, where the Nad Al Sheba race course in Dubai was terminated and WCT lost its project contract. WCT was founded in 1981 and has worked on quite a few landmarks in Malaysia, including the Formula One race circuit in Sepang, a number of iconic shopping malls and projects in Iskandar Malaysia, a huge development corridor at the southern border of Peninsular Malaysia facing Singapore, as well as parts of the Tun Razak Exchange, Kuala Lumpur’s planned new financial centre, the Kuala Lumpur International Airport 1 and 2 and the new building for Malaysia’s Ministry of International Trade and Industry.WCT’s first Middle East project was the Bahrain Formula One International Circuit in 2004, followed by the Formula One circuit at Yas Marina in Abu Dhabi on 2007 and the Yas Marina Yacht Club, as well as the Bahrain City Center and the North Manama Corridor. Later, the company focused on Qatar in the wake of much-expected infrastructure spending ahead of the World Cup 2022. Within Qatar, WCT also worked on notable projects including the New Doha International Airport and the Qatar Government Administrative Building.However, from 2012 to 2013 the group had to undergo an internal restructuring “to streamline its operations” and to improve its debt structure. The group’s various business operations came under a new listed investment holding company named WCT Holdings Berhad.If the new deal in Qatar holds, and assuming a gross margin of eight% for the Lusail project in Doha, analysts of Malaysia’s Maybank forecasts a net profit contribution of $16.4mn to WCT’s financials 2017 from the Qatar deal.