KUALA LUMPUR: CIMB Equities Research expects the RM9bil contract for the third light rail transit (LRT 3) which stretches 37km, to benefit both small and large contractors.
It said on Thursday that though the value of major civil works packages (excluding systems works) could be lower compared to the average RM700mil to RM2bil value for contracts awarded for the MRT Sungai Buloh-Kajang line (MRT 1, RM21bil) and MRT Sungai Buloh-Serdang-Putrajaya line (MRT 2, RM32bil).
“We expect our sector’s top rail pick, Gamuda, to be the frontrunner for the 2km underground/tunneling package given its strong expertise in underground rail tunnels.
“Based on the average combined RM514mil cost/km for MRT 1 and MRT 2, this contract could be worth as much as RM1bil,” it said.
CIMB Research said companies in its coverage that have already secured an LRT 3 package include WCT and MRCB – a 50% JV partner with George Kent for the project delivery partner (PDP) scope of the entire LRT 3 (similar to the role of the MMC-Gamuda JV in MRT 1 and MRT 2).
Other non-rated contractors that may stand a good chance to secure LRT 3’s subsequent packages include AZRB, Kimlun, Mitrajaya, Fajarbaru
Builder, Ikhmas Jaya, TSR Capital, and Bina Puri, among others.
“We maintain Overweight on the sector,” it said.
To recap, public transport operator Prasarana Malaysia has awarded the light rail vehicle (LRV) package for the LRT3 to a consortium owned by CRRC Zhuzhou Locomotive Co Ltd, Siemens Ltd China and Tegap Dinamik Sdn Bhd.
The package is valued at RM1.6bil, one of the project’s biggest. It entails the design, manufacture, supply, delivery, installation, testing and commissioning of 42 six-car LRVs for LRT3. Three new LRT contracts scheduled to be awarded this month.
Three work packages, collectively valued at RM2.5bil, would be announced by end-August. These three would only be awarded to Malaysian companies.
“We expect the three packages to be related to the viaduct/above ground packages including station works, and could also include additional depot packages in Klang. It is unknown at this juncture whether it will include the single 2km tunneling package,” it said.
News reports stated that Prasarana had awarded 11 out of 59 work packages for LRT 3. YTD, only two packages have been awarded to listed contractors.
The pre-qualified companies under CIMB Research’s coverage are IJM Corp, Gamuda, WCT, and Sunway; via construction outfit Sunway Construction.
Recall that 96 contractors were prequalified for the tenders. 55% of the RM9bil project value falls under the open category, where all pre-qualified contractors are eligible to bid. Another 45% have been earmarked for Bumiputera contractors.
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