Trevabina Construction

Topics: Construction, Project management, Building Pages: 19 (5535 words) Published: November 20, 2012
Trevabina Construction

Company Background

Trevabina was incorporated in 2000 as a wholly-owned subsidiary of Treva Corporation Sdn Bhd (Treva Corp) to undertake general contracting and civil engineering works. Treva Corp, formed in 1998, was a property development company owned by Trevari Kamal. Trevabina commenced business in 2001 when it received a project worth $280,000 to build a store for the Ministry of Defence. Between 2002 and 2004, the company took on increasingly larger jobs ranging from $500,000 to $5,000,000 for government agencies throughout Malaysia. These jobs, which took between 9 and 18 months to complete, included the construction of army quarters, schools, and hospitals.

In 2005 Trevabina was awarded a major contract worth $28 million to build an army camp. On completion of this project, it was awarded another army camp project with a contract price of $55 million and an estimated completion period of 3 years. Both the above projects were negotiated contracts secured through personal and political connections. Trevabina was able to realize relatively high profits from these two projects. In addition, monthly progress payments in the range of $1 million to $1.5 million from these two projects enabled the company to enjoy peak performance at a time when many other building contractors were facing financial difficulties.

Between 2008 and 2011, Trevabina had secured another seven government projects worth between $4 million and $20million. All of these projects were fixed-price contracts secured through competitive bidding following the government's decision to adopt the tendering (bidding) system in awarding most of its projects. Due to intense competition to secure government contracts during this period, Trevabina had to bid at very low prices to secure its projects. As a result, the company's profits dropped despite increased work volume. It also began to lose control of operations and experience construction delays and cost overruns. Suppliers began to lose confidence in the company and tightened their credit terms. The inability to buy on credit resulted in shortages of materials which further delayed the progress of its projects. Rising labour and material costs in the early part of the 2000s compounded the company's problems, and in early 2012 the company was close to bankruptcy.

Trevari Kamal

Trevari Kamal was 46 years old, married, and the son of a prominent politician. He had earned a political science degree from the University of Malaya and on graduation had joined the Ministry of Defence as an administrative officer. After 8 years in the civil service, he began to feel a sense of personal stagnation and decided that a more challenging job would be to run his own business. After some thought, he decided to venture into property development and construction. Although he had had no previous experience in the construction business, he felt that, with his father's political connections and his own personal contacts in the government service, he would not have much difficulty in securing some government construction contracts. Furthermore, he had an uncle in the construction business to whom he could turn for advice. Hence, in 1993 Kamal resigned from his job, and, with some money that he had inherited earlier, he formed Treva Corp and later Trevabina.

Kamal played a major role in soliciting and obtaining construction jobs for Trevabina. However, his involvement in the company's internal affairs was limited to reviewing budgets and year-end results. Although he held the position of managing director, he entrusted the overall running of the company to his senior managers as he felt that they were more qualified to deal with the technical aspects of the business than he was. Delegating would also allow him to spend more time with his family and to pursue his interest in social, community, and political activities. In early 2012, in addition to Treva Corp and Trevabina, Kamal...
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