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

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Recruitment Genius: Data Scientist

£20000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Full Stack Software Developer - Javascript

£18000 - £27000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Strategic Partnerships Coordinator

£16000 - £22000 per annum: Recruitment Genius: Their research appears at the f...

SThree: Trainee Recruitment Consultant - Manchester

£18000 - £23000 per annum + Uncapped OTE: SThree: SThree Trainee Recruitment C...

Day In a Page

Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

The haunting of Shirley Jackson

Was the gothic author's life really as bleak as her fiction?
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

Tourists are limp, leaderless and distinctly UnAustralian

A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen