Ahmad Zaki Resource Berhad and its impressive track record

With the Sime Darby debacle in Qatar still ringing on our ears,


In the first half year ended Dec. 31, 2009, the company's energy and utilities (EnU) division recorded an operating loss of 110 million ringgit (32.35 million U.S. dollars).

However, Sime Darby Bhd was quoted as attributing the loss to overruns from its 2.1 billion ringgit (617.65 million U.S. dollars) Maersk Oil Qatar project.

Malaysian Anti-Corruption Commission (MACC) was reported to have taken a proactive step by initiating investigations into the losses suffered by Sime Darby Bhd.


then on 3 September 2010 Ahmad Zaki Resource Berhad, an UMNO linked company,

( you may refer here for a useful listing http://lookchart.blogspot.com/2008/04/umno-link-companies.html )

made this Bursa Malaysia announcement




According to the report by the Edge here:



KUALA LUMPUR: AHMAD ZAKI RESOURCES BHD (AZRB) has initiated legal actions against Saudi Arabia’s Alfaisal University over the latter’s decision to liquidate the performance and advance bonds totalling 52.56 million riyals (RM43.94 million).

AZRB said on Friday, Sept 3 that the dispute arose over the contract agreement with the university for the Alfaisal University campus development project, phase one and two, in Riyadh.

It said that on Aug 23, Alfaisal University sent a letter to AZRB alleging a breach in the performance of the contract, which was strongly disputed by AZRB. On Sept 1, the university unilaterally liquidated the performance and advance bonds.

“The board views that the action of liquidating the bonds is equivalent to a breach of contract on the part of Alfaisal University. AZRB has initiated legal actions against Alfiasal University to protect and defend the interests of AZRB,” it said.

Sounds like a big blow to AZRB, who as recent as May 2010, announced that they were hoping to gain RM300 million worth of jobs in Middle East.

It can be quite expensive taking those deep pockets Arabs to court, that is even before considering the chance of winning and actually getting the judgement enforced.

Published in NST on March 19 2010

Ahmad Zaki Resources Bhd (AZRB) (7078) , a construction group, is eyeing contracts worth some RM300 million in the Middle East as it seeks to grow.

Managing director Datuk Wan Zakariah Wan Muda said the contracts are for building and infrastructure projects in Saudi Arabia.

"These are small developments. We are studying the market and expect to make a bid within the next one to two months," Wan Zakariah told Business Times in an interview in Kuala Lumpur recently.

The above is taken from this excellent write up below:



As an outsider, I do not have the facts on the nature, reasons as well as the rights and wrongs of the dispute, but I would suggest a proper assessment of sovereign risk should be made before a listed company earning substantially from government contracts hence public funds, venture into potentially loss making situation. Some places are just not worth going into.

According to the audited accounts of AZRB, total operating revenue of the group, including sales of goods, contract works and sale of properties, amounted to RM459 million and RM663 million for financial years ended 31 December 2009 and 2008 respectively

Of the RM459 million operating revenue earned in 2009, RM411.7 million was from its construction segment. Broken down by geographical location, RM367.8 million was earned in Malaysia, RM23 million from India and RM68 million from Saudi Arabia.

The link below reveals some of the source of its revenue:


In 2009, it received award (probably due to direct negotiation or instructions) RM60 mil from Putrajaya Holding Sdn Bhd, RM50 mil from TNB and RM756 mil from JKR (which makes me wonder if JKR is redundant now), details as below:

Friday, 2 Apr 2010
received the Letter Of Award from Putrajaya Holdings Sdn Bhd of Block 1, Menara PjH, No. 2, Persiaran Perdana, Precint 2, 62100 Putrajaya (the Works). RM59,989,000.00

Wednesday, 23 Dec 2009
the Letter Of Award from Tenaga Nasional Berhad (TNB) for Hulu Terengganu Hydroelectric Project Lot CW1-Preliminary Works (Works) RM49,479,245.00

Wednesday, 18 Nov 2009
Letter Of Award from Jabatan Kerja Raya Malaysia, Kuala Lumpur for Cadangan Kompleks Kerja Raya 2, Jalan Sultan Salahuddin, Kuala Lumpur (Secara Reka Dan Bina) (The Works). RM309,374,000.00

Monday, 10 Aug 2009
Letter Of Award from Jabatan Kerja Raya Malaysia, Kuala Lumpur for Universiti Darul Iman (UDM), Kampus Besut, Pakej 3-Kerja-Kerja Bangunan (the Works). RM225,132,730

Wednesday, 5 Aug 2009
Jabatan Kerja Raya Malaysia, Kuala Lumpur for Membina Persimpangan Bertingkat Dari Istana Negara di Lot 3952, Jalan Duta, Kuala Lumpur Ke Jalan Duta (the Works). RM106,000,000.00

Monday, 18 May 2009
Saudi Oger Ltd to build Reinforced Concrete Structures for Tower H1-A, Jabal Omar Development, Mecca. RM185,632,185

Monday, 1 Dec 2008
the letter of award from Jabatan Kerja Raya Malaysia, Kuala Lumpur for Merekabentuk, membina, menyiapkan, mengujiterima, mentauliah dan menyelenggara Kompleks Pakar Materniti di Hospital Kuala Terengganu, Terengganu (Works). RM115,064,269.84

AZRB also denied that it was the contractor for Stadium Mirzan Zainal Abidin, which collapsed after 10 months.


KUALA LUMPUR: Keselamatan Seri Paduka Baginda Yang Dipertuan Agong Sultan Mizan Zainal Abidin mungkin terancam jika kerajaan terus membenarkan Syarikat Ahmad Zaki Resources Berhad menjadi kontraktor utama membina istana baru di Jalan Duta, di sini.

Ini kerana syarikat itu merupakan kontraktor utama yang bertanggungjawab dalam pembinaan Stadium Mizan Zainal Abidin di Kuala Terengganu yang menelan belanja RM280 juta, namun runtuh hanya selepas 10 bulan digunakan pada tahun lalu.


A check on its corporate website,


reveals that it was involved in the Indoor Stadium of Terengganu Sports Comples only,

However the website gave an impressive list of projects, such as Formula One Race Circuit, Kelana Jaya Stadium, Petaling Jaya Court, various medical facilities in Ampang, Kuala Terengganu and Kuantan, mosques in Jalan Duta, KLCC & KLIA, loads of education facilities including the Petronas Technology in Tronoh & Darul Imam University Malaysia in Besut....

Which makes me ponder:

1) why AZRB was awarded contracts in various states of Malaysia? Isn't there any other capable contractors around?

2) Given the frequency, variety and consistent award of various projects over the decades, was there any proper open tenders called, careful review of budgets submitted, audit of whether any excesive sub-contracting ("Ali Baba"), comparison of budget vs eventual final cost was made?

3) how much support is enough for AZRB to be strong enough to move into private venture on its own and let other deserving bumiputra companies to get assistance per DEB?

NEP is New Economic Policies and not Never Ending Protection, and let not Dasar Ekonomi Baru becomes Dasar Ekonomi Basi

Per their audited accounts, as at 31 December 2009, AZRB already has equity of RM233 million and RM153million in cash and cash equivalent.

Isn't this strong enough for them to go on their own? Do they still need a constant flow of government project? Or is this another Proton Saga mentality cultivated under Mahathirism?

Curiously, in note 35 of its 2009 audited accounts, a contingent liability of RM18.5 million was not provided as the notes to accounts stated that

"No provision has been made for the contingent liabilities as the outcome of the legal proceedings are still pending and AZSB has supplementary agreements with joint venture partners to indemnify AZSB against any liabilities which may arise therefrom."

Note 9 of the accounts reveals the JV partners' identity:-

"The Group has a 50%, 7.70% and 70% interest in the jointly controlled entities as mentioned in (i), (ii) and (iii) respectively:

(i) BumiHiway-Ahmad Zaki Joint Venture which undertakes the contract for realignment of the route from Putrajaya to Cyberjaya, Selangor, and

(ii) Malaysia-China Hidro Joint Venture which undertakes the contract for design and
execution of works for Bakun Hydroelectric Project Package CW2 - Main
Civil Works at Sarawak."

(iii) Ahmad Zaki-Jasa Bakti Joint Venture which undertakes the design and build for “Sekolah Menengah Sains Hulu Terengganu” at Terengganu.

Firstly the JV partners are the directors themselves

Secondly per the balance sheet, investment in JV shows deficit investment of RM26.6 million and RM26.7 million for 2009 and 2008 respectively so how can the JV pay this RM18million? Given the long list of government projects, your guess is as good as mine.

By the way, how come a very profitable public company's directors can incur so much losses doing the same thing on their own?

Lastly, it is worrying to see huge losses arising not from private business ventures, but public work projects, which at the moment, can run up to deficit of tens of millions - the negative investment of RM26.6 million + another RM18 million + the other JV partners' share...

One man's loss is another's gain. We all know that.


  1. I reckon your last sentence says it all!

    So all your questions asked in this post is quite irrelevant.


  2. thanks, mykantree

    great minds think alike! hahaha

  3. http://www.malaysia-today.net/mtcolumns/from-around-the-blogs/34324-ahmad-zaki-resource-berhad-and-its-impressive-track-record

    written by Colomboloner, September 06, 2010 12:06:07

    Mr, Lee, your next article, please zoom in into YTL, Sunway, Berjaya Group, IJM, Mudajaya and GAMUDA!!!
    +12 ...

    written by batsman, September 06, 2010 09:40:27

    Guess who Ahmad Zaki's resource/s is/are?

  4. @ Colomboloner
    - you got an interesting list......

  5. ketelitian ketahap membanggakan....