Heavy engineering groups from France, Germany and Japan are eyeing a piece of the construction of two Malaysian power plants costing RM6 billion, a report said yesterday.

Malaysia's Jimah Energy Ventures Sdn Bhd, a company owned by Negeri Sembilan's royal family, would build the 700 MW coal-fired power plants in the state, located south of the capital Kuala Lumpur.

Jimah on Aug 10 signed a power purchase agreement (PPA) with national utility giant Tenaga Nasional Bhd. The first unit would start commercial operations on Jan 1, 2009, with the second following six months later.

Another RM6 bil coal plant

The Edge business newspaper said the foreign giants - Sumitomo and Mitsubishi Heavy Industries of Japan, Germany's Siemens, France's Alstom - are expected to court Jimah for a piece of the action for the engineering, procurement and construction (EPC) contract of the coal-fired plants.

If Jimah Energy seeks funding from the EPC contractor, the job may likely go to a Japanese company, it said, citing industry players.

The Edge said this was because Japanese packages normally include financing.

Japan's Sumitomo has already secured a contract to build a RM6 billion 2,100 MW coal plant - the Tanjung Bin power station in the southern Johor state.

At present there are only two coal-fired power plants in Malaysia while there are over a dozen gas-fired plants. Three-quarters of Malaysia's electricity is generated from gas while coal provides only 12 percent.