The affirmation of AAAID on GDC (Putrajaya) Sdn Bhd’s (GDC Putrajaya) Al-Bai’ Bithaman Ajil Islamic Debt Securities reflects the significance of the project in providing the supply of chilled water to all Government premises in Putrajaya; the credit assurance secured with the Government and Putrajaya Holdings Sdn Bhd (PJH) as the main offtakers; and the strong backing from the ultimate shareholder, PETRONAS.

Plant ‘s 1 load factor has stabilized at 35%, reflecting the occupancy of buildings in Putrajaya presently. During FY2003, Stage 1 of Plant 2 was activated to supply chilled water to the Ministry of Finance and in May 2003, the 3,880 Refrigerant Tonne (RT) stand-alone chiller plant was completed to meet the supply of chilled water needed for the recently held Organization of Islamic Conference (OIC).

During the year, GDC Putrajaya’s plants experienced 149 days of planned shutdown and 446 days of unplanned shutdown, out of the total 5,475 running days (15 chillers x 365 days). High unplanned shutdown days recorded during the year was due to teething problems mainly stemming from clogged gas line problems in Plant 2. Since this did not lead to any interruption in the supply of chilled water, no liquidated ascertained damages were applicable during the year. In any event, the total number of unplanned shutdowns is expected to reduce in subsequent years once operations are stabilized.

Natural gas supply risk is mitigated through the 15-year agreement with PETRONAS, that will be automatically renewed on a yearly basis. Operational risk is considered low given that the equipments are technically proven, operated by the experienced personnel from the parent company, Gas District Cooling (M) Sdn Bhd.

In terms of the financial position, total revenue achieved in FY2003 was slightly higher than projected with the partial commissioning of Plant 2 which contributed to a near 40% improvement in chilled water sales. Demand charge (function of contractual cooling load demand) remained as the major revenue contributor (64%) while the balance (36%) was contributed by the variable charge (function of actual monthly consumption). The demand charge lends an element of stability to the revenue base; sufficient to cover part of the fixed operating costs and to service debts. Despite the marked revenue growth, operating profits were offset by hefty interest charges and additional depreciation cost on Plant 2.

Going forward, both revenue and profit contribution are expected to increase in line with the full development and increasing occupancy of buildings in Putrajaya. Based on the management’s latest projection, GDC Putrajaya is expected to achieve a net profit position from FY2006 onwards with the completion of various plants that will attract sufficient revenue to cover depreciation charges and financing costs.

Debt-equity ratio in 2003 was 0.89x, below that of the covenanted 1.0x, despite the RM145.30 million draw down on the BaIDs issue in March 2003. GDC Putrajaya’s share capital was enlarged by RM18 million to RM51.6 million (2002:RM33.6 million) during the financial year, ensuring the finance to equity ratio is capped at 50:50 as per the issue structure.