KUALA LUMPUR, April 26 -- MMC Corporation Bhd is still waiting forinstruction and communication from the government on the revival of theRM14 billion double-tracking rail project which was deferred in late 2003.

"We welcome the revival of project. We have to wait for the government'sdecision and further announcement," MMC group chief executive Datuk IsmailShahudin told reporters after the company's annual general Meeting, hereTuesday.

He said the MMC-Gamuda consortium had carried out a lot of preliminaryworks such as the design for the project and therefore it could be revivedquickly once the decision was made.

The consortium received the letter of award for the stretches from JohorBahru to Seremban and from Ipoh to Padang Besar, but no contract wassigned.

Currently, work on the Ipoh-Rawang stretch is ongoing but MMC is notinvolved, Ismail said.

He said while there has been no real discussion on revival of the project,there is ongoing dialogue and persuasion in terms of trying to get theproject going again.

MMC has always highlighting the need for this project to get going, mainlybecause it feels that infrastructure in the country's railway industry isstill in dire need of upgrading, and this is also a good impetus foreconomic developments, he added.

Monday, Transport Minister Datuk Seri Chan Kong Choy said the Rawang-Ipohelectrified double-tracking railway project, which was delayed, would becontinued under the Ninth Malaysia Plan (9MP).

He said the ministry had submitted a proposal to the government to extendfurther the current Seremban-Rawang double-tracking to the north.

On MMC's performance in the first quarter of 2005, Ismail said theoperating profit is expected to be higher than the same period last year,with higher energy cost not having much impact on results.

"Sensitivity against the price of energy is quite well boxed in ourbusinesses," he said.

He added that only the engineering and construction business is affectedby higher fuel costs as the related material construction prices have alsoincreased.

"Again this is on project by project basis. You have to price yourselvesaccordingly in term of the new projects you are going to undertake orbidding," he explained.

Ismail said independent power producer, Malakoff, which is the maincontributor, is not directly affected by the high energy cost as the riskis separately underwritten.

Malakoff's generation capacity now is 2,885 megawatts or 18 percent of thetotal power generation capacity in Peninsular Malaysia, and this isexpected to increase to over 5,000 megawatts or a quarter of the totalpower generation capacity in 2007.

Ismail said Gas Malaysia, which is selling natural gas, would onlyrenegotiate the price of gas supplied by Petronas at the end of this year.

He said overall, the first quarter's results should be fairly goodcompared with last year, primarily driven by extraordinary gains such asthe sale of MMC's eight percent stake in Malaysia Smelting Corporation and50 million Sime Darby shares.

He added that MMC was happy with the developments within units in thegroup, with Malakoff, Gas Malaysia and Port of Tanjung Pelepas "trendingvery well in term of operations".

The engineering and construction division through Tronoh and IJM arelooking overseas for projects with several successes, Ismail said.

Tronoh, an associate company of MMC, has 20 percent interest in IJM.

IJM recently secured a RM480 highway project in Rajasthan, India, and aRM263 million construction contract at the Dubai International Airport.

In oil and gas, MMC Oil & Gas Engineering Sdn Bhd secured an engineering,procurement, construction and commissioning contract for the exportpipeline for the Melut Basin development in Sudan.

Ismail said MMC was aiming to be more involved in overseas ventures.

"However, in all ventures abroad you need a foothold or toehold firstbefore you can make your presence felt," he added.

On the desalination and power project in Saudi Arabia, Ismail said MMC andits consortium members comprising Khazanah Nasional and Tenaga NasionalBhd together with Saudi public and private sectors are still waiting forthe official green light.

The consortium is the only bidder for the project.

Ismail said MMC was also now moving into waste management businessfollowing its acquisition of 51 percent interest in Recycle Energy SdnBhd.

The company is building a plant in Semenyih, Selangor, with the capacityto process 700 tonnes of waste daily from Kajang which is expected to beready by year-end.

Ismail said the total project cost was RM100 million, with RM60 millionfor the recovery centre to extract recyclable waste and the remaining RM40million for a five-megawatt power plant to supply electricity to TenagaNasional at 17 sen per kilowatt/hour.

The power plant is scheduled to be built next year.

-- BERNAMA