KUALA LUMPUR: A flurry of major construction projects in the country both at the state and federal government level could see further developments moving forward, following the resolution of the six-state elections.
According to RHB Research, these are the Mass Rapid Transit 3 project which is undergoing a cost review, the Bayan Lepas Light Rail Transit (BLLRT) and the remaining phase of the Pan Borneo Highway.
It noted that more importantly, the federal government’s nationwide flood mitigation projects could see greater focus.
These were initially targeted to begin in June 2023 and are worth some RM10.9bil under a pre-qualified tender process.
“Hence, we may see further upside in terms of value of jobs awarded to contractors in the coming months,” RHB Research said.
It noted that government job flows could pick up in the coming months, since the federal government will likely be in a stronger position to focus its efforts on rolling out infrastructure programmes and implementing its reform agenda.
Data from the Construction Industry Development Board showed the total value of construction jobs awarded so far this year until July 2023 reached RM59.4bil compared with RM77.6bil in the same period last year.
RHB Research’s sector picks are Gamuda Bhd
, Sunway Construction Group Bhd and Kerjaya Prospek Group Bhd.
Meanwhile, respective state-funded projects such as the redevelopment of the Shah Alam Sports Complex may likely commence works in the fourth quarter, it said.
“The main developer for the project is Malaysian Resources Corp Bhd, whereby development works which are estimated to be between RM700mil and RM1bil that will be undertaken by the company may be satisfied via land swaps by the Selangor government,” the research house said.
As for the BLLRT, it may now be funded by the federal government.
The incumbent Penang government maintained its position may facilitate smoother discussions with the federal government to roll out the BLLRT that is targeted this year-end.
Meanwhile, it said the ongoing request for information (RFI) exercise for the Kuala Lumpur-Singapore High Speed Rail (KL-SG HSR) may also help lift sentiment on the sector.
An indication of the industry’s strong interest was seen when MyHSR Corp Sdn Bhd announced that the purchase of the KL-SG HSR project’s RFI documents has been extended throughout the concept proposal stage until Nov 15, 2023.
MyHSR had said earlier that this was done due to the overwhelming response and requests from industry players, where close to 30 local and international firms had registered to purchase the RFI documents as at end-July.
“We retain Gamuda, Sunway Construction and Kerjaya Prospek as our top picks given their steady job replenishment trend and strategic hedge against any downside risks from the domestic construction landscape, amid their commendable exposure in overseas jobs and private industrial jobs,” RHB Research said.
