Malaysian Trade Ban: Thousands of British jobs put at risk: UK firms may lose pounds 3bn, with airport contracts worth pounds 400m among the first to be cancelled

BRITISH companies stand to lose work worth hundreds of millions of pounds, headed by their share of a pounds 2.3bn deal to build a new international airport near Kuala Lumpur, following Malaysia's shock move to scrap orders with the UK.

The decision also puts hundreds, possibly thousands, of jobs at risk among UK contractors bidding for defence, construction and utilities orders in Malaysia.

The Association of Consulting Engineers estimated that work worth up to pounds 3bn could be lost. Share prices of leading British companies involved in Malaysia, such as GEC and Trafalgar House, tumbled as news of the retaliation over the Pergau arms-for-aid scandal hit the financial markets.

But the 150 other British companies in Malaysia will also suffer. They will not be able to pick up valuable subcontracting and consultancy work.

British exports to Malaysia reached pounds 965m last year, making it our biggest trading partner in South-east Asia, and included pounds 182m worth of electrical machinery, pounds 159m in telecommunications and engineering equipment and pounds 102m worth of motor vehicles. Imports were pounds 1.4bn.

About 5,000 expatriate workers and their families live in Malaysia. Most are reliant on the big-ticket deals now being outlawed.

The first major casualties will be Balfour Beatty, Trafalgar House and GEC Marconi, the three British members of the Anglo-Japanese consortium developing the new Sepang airport, 25 miles (40km) outside Kuala Lumpur. Their contracts, worth at least pounds 400m, will now be terminated.

British Aerospace has just begun delivery of the first of 28 Hawk military trainer jets worth pounds 300m. That contract is not thought to be a risk since it was signed in 1988, but BAe had been hopeful of supplying Malaysia with its Rapier ground-to-air missile system.

'There is a threat to future business which is why we have to be very careful about not offending Malaysia,' a spokesman said.

Hopes that Malaysia would place a possible order for 24 fast naval patrol boats with a British warship yard have also been dashed.

GEC has total orders with Malaysia worth more than pounds 500m, including a pounds 400m contract to build two naval frigates at its Yarrow yard. A spokesman said: 'We are still trying to assess the situation and seeking clarification, but what they appear to be saying is that existing contracts are not affected.'

However the loss of the airport contract will deny GEC orders it had hoped to win for air traffic control systems, communications equipment and transport systems.

Trafalgar House is also a contractor on the Pergau dam, while its John Brown engineering subsidiary is building two gas-fired power stations worth pounds 185m. 'Malaysia was one of four or five countries worldwide in which we saw major prospects,' a spokesman said. 'As of today that is no longer the case. There is a lot of work there which we will not now get a fair crack at. There will be quite a knock-on effect for jobs.'

Rolls-Royce, the aero-engine and power engineering group, entered into a joint venture with the Malaysian company EPE Power Corporation last Monday to supply power transmission equipment. A spokesman said: 'It is really a question of waiting and seeing what will happen.' The company is also building 11 electricity substations in Malaysia and manufactures the Adour engines for the BAe Hawk order.

The electricity generators National Power and PowerGen warned that tremendous opportunities could be lost. Both have been sounding out potential power station orders.

British Gas may also be affected. It has an offshore exploration licence in the Sabah region and is involved in a joint venture to build a gas-fired power station in Kuala Lumpur. A spokesman said: 'To our knowledge private contracts are not an issue.'

The construction firm Bovis, part of P & O, is building a theme park in Malaysia and a property development in Kuala Lumpur, but doubted that either venture was at risk.

Taylor Woodrow, another construction company, has several private sector projects in Malaysia including a pounds 225m contract to build a light transit railway in Kuala Lumpur with AEG of Germany. John Laing is involved in a pounds 150m project to build 12 hospitals and a pounds 25m airport contract through a local company, but said it thought neither contract would be affected.

Leading article, page 14

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
food + drink
Arts and Entertainment
musicBand's first new record for 20 years has some tough acts to follow
News
Shoppers in Covent Garden, London, celebrate after they were the first to buy the iPhone 6, released yesterday
tech
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Life and Style
healthFor Pure-O OCD sufferers this is a reality they live in
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Website Editor

£15 - £17 Per Hour: Clearwater People Solutions Ltd: Our client is currently r...

Primary Teachers needed for supply in Ipswich

£21552 - £31588 per annum: Randstad Education Cambridge: We are looking to rec...

Primary Supply teaching jobs in Stowmarket

£21552 - £31588 per annum: Randstad Education Cambridge: Randstad Education ar...

Year 1 Teacher

Negotiable: Randstad Education Birmingham: The Job An inner city Birmingham sc...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments