CIMB Research expects basic infrastructure projects to be prioritised in Sabah and Sarawak under Budget 2025.
PETALING JAYA: The upcoming Budget 2025 is expected to kick-start a new wave of public infrastructure next year.
According to CIMB Research, development expenditure will likely be maintained at RM90bil under Budget 2025, similar to the projected allocation for this year.
“Local construction bellwethers expect further rationalisation in government subsidies, for example, for RON95 to kickstart a new wave of public infrastructure spending,” the research house wrote in its report.
This could start with the implementation of two mega projects in Penang namely the Penang International Airport (PIA) and the RM8bil Mutiara light rail transit (LRT) line.
While it is premature to identify the potential winners of the PIA upgrade works, CIMB Research said Gamuda Bhd
is in a strong position to bag nearly RM5bil worth of construction work for Mutiara LRT.
This is based on Gamuda’s 60% stake in SRS Consortium, which will play a lead role in building the new LRT line.
“Another key infrastructure project that could feature under Budget 2025 is an internal rail link within Johor Baru city that supports the scheduled commencement of the Johor-Singapore rapid transit system link service on Jan 1, 2027,” added CIMB Research.
It noted that two options had been tabled namely, a 30km LRT initially estimated to cost RM20bil or a 50km autonomous rail transit, which purportedly cost RM7bil.
“The rail service forms part of a seamless local transportation network that also includes the planned expansions of the North South Expressway and Senai-Desaru Expressway,” it said.
The research house stated the current status of the proposed KL-Singapore high speed rail and Mass Rapid Transit 3 projects remains unclear at this juncture, although the latter is open for public viewing.
“We expect basic infrastructure projects to be prioritised in Sabah and Sarawak under Budget 2025.”
The research house noted that the development spent for the first half of 2024 shrank 24.2% year-on-year to RM34bil, while domestic construction flows were heavily supported by private mandates, especially from data centres and advanced technology facilities.
“We expect the government to crank up the disbursement of development expenditure from the fourth quarter of 2024, and sustain its momentum in 2025,” CIMB Research wrote.
“We expect Budget 2025 to reaffirm the government’s commitment towards ensuring the success of the Public-Private Partnership Masterplan 2030,” it added.
