KUCHING: The much-anticipated Pan Borneo Highway (PBH) project is not just changing Sarawak’s connectivity prospects, it is also expanding the capabilities of the local supply chain.
Small and medium enterprises (SMEs) in particular are benefitting greatly from the economic multiplier benefits of the project. For Sarawakian Bumiputera companies that are involved in the project, the PBH is a much-awaited impetus that is set to increase their profitability and spur further growth and development in the Land of the Hornbills.
In addition, the emergence of new businesses is providing locals who are living along the PBH alignment an opportunity to increase employment prospects and transform their livelihoods.
Take the WPC 04 work package awarded to Naim Gamuda (NAGA) JV Sdn Bhd for example; the 91km road stretching from Pantu Junction to Btg Skrang, Sarawak, is steadily enlivening and enriching neighbourhoods like Sri Aman and Lachau.
As the project progresses, locals are finding their way into the ecosystem as big and small entrepreneurs, by venturing into business sectors such as food and beverage, transport, labour supply and other support services.
As of October 2017, over 222 contractors and suppliers have become part of Naim Gamuda’s value chain, which is worth RM794 million in total contracts. Of this, Sarawakian Bumiputera SMEs were awarded contracts totalling RM400 million, which makes up 50%. The contract works cut across suppliers for specialist and supporting works such as earthworks, geotechnical, piling and drainage works; construction materials and supplies for building materials, plant and equipment.
WELCOME BOOST FOR SARAWAK BUMIPUTERAS
Eastbourne Corporation Bhd is Naim Gamuda’s largest Sarawakian Bumiputera subcontractor that was awarded pavement contracts.
The multi-business company was established at a time when not many Bumiputera companies were involved in Sarawak’s construction industry. Since 1991, Eastbourne has successfully completed several projects worth over RM2 billion.
Its executive director Muhd Mazharuddin Siddiqi said the company also plays a major role in uplifting the social and economic status of Sarawak by providing job and business opportunities to locals.
“Our work has started on WPC 04. We recently recruited some specialists and experts and will be hiring more as work for the project progresses. We have also invested close to RM2 million on machineries like excavators and bulldozers as the magnitude of the project demands it.”
“This collaboration enables sharing of information and knowledge transfer between Naim Gamuda and us, which works towards enhancing the capabilities and skills of our joint workforce. I strongly believe that together, we can be a major catalyst for Sarawak’s economic growth and increase our competitive edge respectively,” said Muhd Mazharuddin.
A.P.W.D Consortium and Borneo Assets Sdn Bhd are the other major Bumiputera companies that have secured contracts in Naim Gamuda’s WPC 04 package.
A.P.W.D’s multimillion ringgit contract provides site clearance and earthwork services that are currently on-going while Borneo Assets contract for culvert and drainage works will start soon. The latter hopes to upskill its workforce through training provided by CIDB and Naim Gamuda. This will not only help these companies grow but will also equip the local talent pool with additional industrial expertise that will inevitably raise the standards of the construction industry in Sarawak and make these companies globally competitive.
LOOKING BEYOND PROFITABILITY
Kejuruteraan Syatek Sdn Bhd is another Bumiputera company that has made a big impact on WPC 04 – the company secured four contracts worth RM1.4 mil for geotechnical and laboratory works.
The consultancy service provider advises Naim Gamuda on soil conditions through its testing services among other things. This is of paramount importance to any main construction contractor as it gives them insights to the ground conditions they are dealing with.
The terrain for PBH project, including the WPC 04 alignment is made up of peat soil that needs to be removed or managed accordingly before the foundation can be laid.
“I am an engineer myself. There is lack of awareness on the importance of services like soil investigation and testing. You need such expertise to tell you how deep you can drill for piling works, how safe the area is for land clearing works and much more,” said Kejuruteraan Syatek’s managing director Abang Abdul Halil Abang Naili.
He added that he was keen to explore opportunities on slope monitoring and protection advisory services for the project. Apart from offering proper solutions, such information can keep the workplace accident-free.
For Jimisar Corporation Sdn Bhd and Jimisar Autotrade Sdn Bhd (a 100% Bumiputera company under Ismaco-Jimisar Group), the WPC 04 contract was one of their more unique ones. It not only transformed their skeletal branch at Sri Aman into one of its most thriving business units, it also gave them an opportunity to play a major role in inculcating road safety awareness in the area, given that they get to participate and learn from the safety campaigns and safety training organised by Naim Gamuda on-site.
For the record, Sri Aman is the central location for WPC 04, which covers Pantu Junction to Btg Skrang. Apart from Naim Gamuda’s contractor role for the package, it also runs Sarawak’s first training centre dedicated to quality, safety, health and environment (QSHE) at Sri Aman and the centralised labour quarters specially built to house construction workers.
“We have a 300-strong workforce and have been around for 35 years. Our association with Naim Gamuda started last year, when we successfully supplied 40 over units of Mitsubishi vehicles for WPC 04,” said Jimisar Autotrade Sdn Bhd managing director Mariana Ismail.
“Naim Gamuda was our first and biggest customer that purchased our latest fleet, even before we officially launched it. Once the order went through, we had to ensure all our technicians in Sri Aman were equipped to handle their project needs.”
“Before this, our technicians were only involved in basic maintenance work. Any other major issues had to be diverted to our Kuching office but because of the volume of our vehicles in Sri Aman now, we had to ensure that our entire crew are factory-trained,” said Mariana.
To Jimisar, the contract is transformational. Not only did it help expand their operations and business in Sri Aman, the company upskilled their employees by retraining them on their technical as well as after-sales skills.
They were also given the responsibility to handover a safety vehicle – a first of its kind task – to function as a rescue vehicle for WPC 04, placing great emphasis on safety and health for the project.
“That’s not all. Local subcontractors and suppliers know what sort of road conditions our vehicles are exposed to. As they take note of Naim Gamuda’s purchases, they tend to see our fleet as reliable and efficient machines and buy it for themselves,” said Mariana.
She added that the contract has definitely strengthened their company’s position as one of the strongest fleet player, not only in Sarawak but in Malaysia leading them to be awarded Top Fleet Dealer in Malaysia last year
“To have this supply contract with Naim Gamuda is a big endorsement to Mitsubishi Motors and our services. As a Sarawakian Bumiputera company, we also feel extremely privileged to be part of the Pan Borneo project,” said Mariana.
She added the contract has given them the opportunity to prove their level of competitiveness and be innovative in their product and service offerings to Naim Gamuda, improving business altogether.
STRINGENT PROCUREMENT PROCESS
A proper business strategy is crucial in determining a supply chain for projects the size of PBH and this also applies to WPC 04, said Naim Gamuda Project Director Deric Kua Kee Sin.
Kua said subcontractors for WPC 04 are selected based on two key criteria: experience and financial standing.
“For WPC 04, we subtrade. Our procurement strategy is such because it is a huge project and we need reliable subcontractors to work with us. For instance, drainage works has been sub-contracted to eight different contractors because of the length of the alignment. Seventy-percent of site clearance work are done by us, while 30% is given to subcontractors,” said Kua.
This way, he added, Naim Gamuda is able to monitor the project progress and maintain a healthy pace besides employing capable and reliable subcontractors and suppliers.
He added that the Bumiputera subcontractors for WPC 04 are among the best in the business and have an impressive track record.
To Kua, the PBH project is a massive game changer for Sarawak. Based on his experience, the project’s economic spillover pushes Sarawak towards unlimited development prospects and will enable local SMEs to hone their expertise that will in turn equip them with the necessary knowledge and know-how to compete globally.
If WPC 04 alone has this much potential to spur the local economic growth, imagine what the rest of the PBH project can do for Sarawak and neighbouring Sabah.
ROLE OF LBU
Lebuhraya Borneo Utara Sdn Bhd (LBU) is the Project Delivery Partner (PDP) for the Pan Borneo Highway Sarawak.
A home-grown Sarawak company based in Kuching, LBU consists of a team of qualified Bumiputera personnel with construction as well as project development and management experience. LBU is supported by a Board of Directors with highway construction expertise crucial for the delivery of the Highway according to time and budget specifications.
It has been a long journey for LBU to develop and propose a suitable and workable project concept to the Government of Malaysia for Pan Borneo Highway. Apart from delivering the best value, LBU made a commitment to the Government to involve local talents, contractors, companies and resources towards building up local expertise in highway construction.