KUALA LUMPUR: Faber Group Bhd (FGB) has clinched a contract to upgrade and develop infrastructure facilities in Abu Dhabi with an annual contract value of AED154 million (RM142.1 million), with annual renewal options for another four-year period.

FGB said yesterday its unit Faber Ltd Liability Company (Faber LLC) had been awarded the contract by the department municipal affairs of western region municipality (WRM), Emirate of Abu Dhabi, to improve and maintain the infrastructure facilities and projects at Madinat Zayed Zone-1 for one year, with the renewal options.

Assuming the contract is renewed annually for the additional four-year period, the total contractual sum will amount to RM710.5 million.

The contract will be automatically renewed annually, provided that Faber LLC was able to perform its duties according to the contract.

It is understood that the contract will be a win-win situation for both parties, as WRM is not required to go through a re-tendering process annually, while Faber LLC would be able to continue the works under the contract for five years.

Faber LLC was awarded the conditional contract in March 2009, but had only made the announcement yesterday after meeting the conditions set by WRM.

FGB said Faber LLC had met all conditions on Nov 22, 2009, which included submitting a performance bank guarantee of AED15.4 million and a retention bank guarantee of AED7.7 million.

Faber LLC also had to submit relevant insurance documents and draw up a formal agreement after fulfilling Faber LLC’s registration requirements with Abu Dhabi government authorities.

FGB managing director Adnan Mohammad said the group expected the contract to contribute positively to its earnings for the financial year ending Dec 31, 2009.

“The success of securing this contract is a catalyst for our growth in the non-healthcare integrated facilities management, which has been our strategic focus and initiatives over the last few years,” he said.

This article appeared in The Edge Financial Daily, November 24, 2009.