Public-listed developer Ireka Corp Bhd looks set to diversify its business interest with a recent tie-up with two China-based logistics and transportation companies.
In a memorandum of understanding (MoU) signed this week, Ireka has formed an agreement with Beijing-based CRRC Urban Traffic Co Ltd (CRCC) and Shentong Express Co Ltd (STO) to explore a possible collaboration in urban passenger transportation and logistics businesses.
Among the key goals is an endeavour to introduce an autonomous rail rapid transit (ART) system in Malaysia.
The MoU will see CRRC, which has an 8.48% stake in Ireka, conduct a study on the viability of the driverless ART system in Malaysia. Unlike our existing elevated and underground rail systems, the ART will operate on roads much like the tram lines found large metropolises around the globe.
The ART system has already been developed by the CRRC group and it is currently in operation in Zhuzhou, China. Malaysia will be a gateway into expanding the wide use of this system in South East Asia.
CRRC said the company chose to work with Ireka because of its 50-year track record in the local development industry and the strong technical ability and professionalism it has garnered from these years of experience.
“Our investment in Ireka was a good start for both companies to create a synergistic collaboration and investment. If the Malaysian market requires us to invest more, we will definitely do so,” said president of CRRC group Gu Yifeng, who did not rule out the possibility of acquiring a larger stake in Ireka in the future.
Ireka said its move into new business arenas is in line with the Malaysian Government’s initiative to drive higher utilisation of public transportation solutions as well as the rising demand for e-commerce.
Valid for 24 months, the MoU also supports STO’s expansion plans in Malaysia and Southeast Asia. STO is an integrated logistics service provider that focuses on express delivery of municipal, inter-provincial and international courier items.
The feasibility study for both ventures is expected to be carried out over the next six months, following which, all parties will move towards a more definitive agreement.
Despite the move into new business streams, Ireka’s deputy managing director Monica Lai Voon Huey said the group’s core businesses in infrastructure, real estate and technology will remain unchanged.
“Construction accounts for almost 90% of our turnover and our outstanding order book currently stands at about RM400 million, which will likely keep us busy for two years,” Lai said.