A NEW entity is set to join a host of other local firms exporting the Singapore brand of infrastructure development worldwide.
Shareholders will vote on the proposed merger of Keppel Infrastructure Trust (KIT) and CitySpring Infrastructure Trust on Thursday.
The merged entity will have more firepower to take on major projects in the fast-growing infrastructure sector, which has been gaining traction in recent years as Singapore works to establish itself as the region's infrastructure hub.
Demand for infrastructure - ranging from roads and railways to water, electricity, power, and related technologies - rises with economic growth and urbanisation.
This is especially pronounced in Asia. The region continues to lead the world in economic growth and will add 1.4 billion new urban residents by 2050, according to a report by trade agency IE Singapore last October.
Coupled with underinvestment in the past, Asia faces a large and growing investment need in infrastructure of up to US$1 trillion (S$1.3 trillion) a year, only a fraction of which is being met, the report added.
After KIT's purchase of a 51 per cent stake in a power-generation facility, the combined trust will have total assets of more than $4 billion and a market value of around $1.9 billion.
With its increased liquidity and scale, the enlarged Keppel Infrastructure Trust will be better positioned to capture major overseas opportunities, said Mr Khor Un-Hun, chief executive of Keppel Infrastructure Fund Management.
It is understood that British transmission lines and water projects are among the European projects that could appear on the investment radar of the combined business. South-east Asian infrastructure projects may not garner the attention of the combined trust, which is looking for more mature assets and not so much those that are being developed.
However, Asia's vast potential has already caught the attention of a number of other Singapore players. This is most prominently illustrated by the mega merger of Ascendas, Jurong International Holdings (JIH), Surbana International Consultants and Singbridge Group.
The $5 billion merger, officially agreed upon in February, aims to position the companies for Asia's urbanisation boom.
Within the platform, which will be formed within the first half of this year, the four companies will be organised into two arms. Ascendas and Singbridge will become the asset investment and holding arm, while Surbana and JIH will be the technical unit offering construction and engineering services.
All four companies are already well-established players in urban, industrial and infrastructural development.
"We see immense growth potential and development opportunities as urbanisation gathers speed across China, India and emerging markets in South-east Asia," said Mr Miguel Ko, the chief executive of Ascendas-Singbridge.
"The (merger) allows us to leverage and combine our individual strengths to meet this demand and export Singapore's expertise in sustainable urban development."
Even small and medium-sized enterprises are getting in on the action.
Home-grown wastewater-treatment company Flagship Ecosystems won a contract to build, own and operate a centralised effluent-treatment plant in the Bangladeshi capital of Dhaka. The plant began operations in 2012.
The company is now exploring water-related projects in Indonesia and Myanmar, and another one in Bangladesh, said chief executive Theron Madhavan.
"We actually did not go looking for these projects, they came looking for us. If we do decide to expand in a big way, there are a lot of opportunities in South-east Asia, Indochina and South Asia," he added.
Singapore companies can play a significant role in the regional infrastructure market, the IE Singapore report said. "Companies will need to build infrastructure-development capabilities and project track record. They should establish strong partnerships in markets that they are interested in and identify projects that can serve as an entry point for them."
chiaym@sph.com.sg
This article was first published on Apr 27, 2015.
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