MRT awards spur local construction industry
KUCHING: The award of four construction packages of the Sungai Buloh-Kajang My Rapid Transit (MRT) line worth RM3.22 billion is set to spur local construction industry players.
OSK Research Sdn Bhd (OSK Research) analyst Kong Heng Siong in his online note revealed that the viaduct packages, codenamed V1 (Sungai Buloh–Kota Damansara), V4 (Section 17, PJ-Semantan portal) and V7 (Bandar Tun Hussein Onn–Taman Mesra) have been awarded to Syarikat Muhibah Perniagaan dan Pembinaan Sdn Bhd, Sunway Construction Sdn Bhd and MTD Capital Bhd respectively.
“This means that five out of the eight viaduct packages for the entire line have been dished out, with IJM and AZRB having clinched the other two packages previously,” he highlighted.
“Meanwhile, the Sungai Buloh depot work package worth RM459 million was awarded to TRC Synergy.
“This announcement means that two out of the three names that we have alluded from previously – namely Malaysian Resources Corporation Bhd (MRCB), Sunway Group and TRC Synergy Bhd – have secured some works relating to the SBK line so far.”
Meanwhile, ECM Libra Capital Sdn Bhd (ECM Libra) analyst Benjamin Lee noted that much advance construction works have been made to date.
“Works such as land-clearing at the Sungai Buloh terminal and construction of tunnel boring machine launching shafts at Cochrane and Semantan, have started last year,” he noted.
“The main civil and structural engineering works on the Sungai Buloh-Kajang MRT line is expected to begin soon, starting with the elevated portion.”
Meanwhile, he added that works on the underground Semantan–Maluri tunnel would start by March 2013, after Gamuda-MMC takes delivery of the first six of 10 tunnel boring machines purchased for the project.
“The adjoining V2 and V3 viaduct packages running from Kota Damansara to Dataran Sunway and on to Section 16, would be awarded by the end of June this year,” he opined. “The Kajang depot, V8 viaduct (Taman Mesra–Kajang) and most of the eight station packages are expected to be awarded in the third quarter of 2012.”
Lee noted that there would be two more lines which are the MRT 2 (Circle/Orbital Line linking Mid Valley–Ampang–Mont Kiara–Sentul) and MRT 3 (North-South radial line linking Selayang–Serdang–Putrajaya), which would be rolled-out in phases starting from the second half of 2013 after feasibility studies by MRT Corp have been finalised.
The total cost for the three MRT lines was estimated at around RM50 billion to RM60 billion.
From this, Lee expected trading sentiment to turn more positively on the construction sector in coming months, backed by impending mega project awards which were likely to be front-loaded ahead of the 13th Malaysian General Elections sometime in 2012.
In its view, ECM Libra believed that both IJM Corporation Bhd (IJM) and WCT Bhd (WCT) stood a chance of securing another of the remaining 12 elevated civil work packages that they prequalified for, given their proven engineering track record and strong balance sheets.
“We like IJM for its well-diversified business portfolio (plantation, property, industrial products, infrastructure and construction), which is able to cushion any potential earnings shortfall from its construction segment,” he added.
“Also, we think that WCT has sufficient machinery and labour that they will redeploy from the Middle East to handle major local engineering projects.”
OSK Research’s Kong also maintained an overweight outlook on the construction industry, as he was positive on the progressive award of MRT contracts and expected the news flow to surge over the next few months with momentum picking up going into the third quarter.
source : https://www.theborneopost.com/2012/05/12/mrt-awards-spur-local-construction-industry/
