CK awaits government project windfall

Construction News Laos

The planned launch of government projects worth hundreds of billions of baht will drive the revenue of Ch. Karnchang (CK) next year to a record high of 100 billion baht, says the country’s second largest contractor.

The chairman of the executive board Plew Trivisavavet said CK is waiting to sign construction contracts valued at 94 billion baht it has been awarded. These contracts will generate revenue over the next six to seven years.

CK has backlog orders of 13 billion baht.

“We are preparing to bid for state projects targeted to tender next year such as high-speed trains and additional electric metro lines, as well as power plants developed by private producers,” he said.

The contractor has won contracts for the mass transit Purple and Blue lines in greater Bangkok. The Purple line contract is valued at 14 billion baht and started generating revenue the last quarter, while two Blue line contracts are expected to be signed next month.

“We are expecting to win many more contracts next year as the government is planning to open bids for projects worth several hundreds of billion baht,” he said.

Meanwhile, CK and its joint venture partners plan to float shares of South East Asia Energy (SEAN), which won a contract to build the Nam Ngum 2 hydroelectric power plant in Laos, on the Stock Exchange of Thailand next year.

Other major shareholders of SEAN are Bangkok Expressway Plc and Ratchaburi Electricity Generating Holding.

“A team of our financial advisors is working closely with our staff. SEAN will be ready for listing next year,” Mr Plew said.

Vorapote Uchupaiboonwong, CK executive vice-president for accounting and finance, said the two small power producer (SPP) projects CK bought shares in will be operational and start to generate revenue for the company in April next year.

Its board approved the acquisition of a 30% stake in SPP projects in Nakhon Ratchasima and Chiang Rai costing 55 million and 75 million baht, respectively.

At the same time, CK has been in talks with listed companies to reduce its shares in Bangpa-in Co-generation, the operator of an 120-megawatt SPP plant, from 81% at present to 36%. This SPP project is under construction and will be operational by mid-2013, said Mr Vorapote, adding that CK has joined the bidding for another 120-MW SPP project.

It is also in discussions with strategic partners who want to acquire shares of the 1,280-MW Xayaburi power plant in Laos. It aims to reduce ownership in the wholly-owned hydroelectric plant to 30%.

Shares of CK closed yesterday on the SET at 8.70 baht, down 10 satang, in trade worth 108.8 million baht.


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