KUALA LUMPUR: British engineering, construction and services group Balfour Beatty PIc has set up an office here to be its regional hub to get a slice of the Southeast Asian rail market.

It is eyeing the electrification component of the two major rail projects in Malaysia as outlined in the Third Outline Perspective Plan 2001-2010 yesterday.

The new company, Balfour Beatty Rail Sdn Bhd, is a joint venture between its subsidiary Balfour Beatty Rail Power Systems and its Malaysian partner Multi Discovery Sdn Bhd, a wholly-owned subsidiary of Ingress Corporation Bhd. The joint venture will see both companies holding 49% each in Balfour Beatty Rail Sdn Bhd while its chairman, also Ingress's chairman, Rameli Musa, will hold 2%.

Speaking to reporters at a press conference yesterday, Manfred Leger, managing director of Balfour Beatty Rail Power Systems, said: "We are aggressively trying to get ourselves in for the electrification side of these projects."

The two major railway projects are the northern section connecting Ipoh to the Thai border and the southern section connecting Seremban to Johor Bharu.

The Seremban-Johor stretch has been awarded to the Chinese government on a barter trade basis, in exchange for palm oil purchase by them.

The Ipoh-Padang Besar contract has been given to the Indian government on a barter deal. Both projects are about RM12 billion.

The company is also currently in negotiations with several parties to secure the electrification works for the Ipoh-Padang Besar stretch of the electrified double-tracking contract.

Balfour Beatty has recently been awarded the RM400 million electrification work on the railway from Rawang to Ipoh, while the infrastructure works for the project was given to DRB-Hicom.

"The 175.15km Rawang-Ipoh stretch, which has a total contract value of RM4.3 billion, is due for completion in 45 months and should be in full operation by 2004," Rameli said.

According to Rameli, the Rawang- Ipoh project is expected to impact on Ingress's bottom line within one-and- a-half years.

The stretch is financed 80% by off- shore funds and 20% by soft loans from the Malaysian government.

On the group's future developments, Leger said: "We will continue to focus on railways as that is our main growth area and we are looking at bidding for new projects. "

Balfour Beatty's involvement in Malaysia's development dates back 70 years when the company engineered the Perak River Hydro-Electric Power Group.

"We are comfortable working in joint ventures and we also plan to be a strong sub-contractor for turnkey projects here," Leger said.