RHB has maintained a “Neutral call on the construction sector in spite of the announcement by the Minister of Transport Datuk Datuk Seri Dr Wee Ka Siong said the tender for construction works on the Mass Rapid Transit 3 (MRT3) Circle Line project will be opened for tender in May.
The research house however said that the potential beneficiaries include Gamuda (GAM MK, TRADING BUY, TP: MYR3.55) which has participated in MRT1 and MRT2 via the MMC-Gamuda JV, and Sunway Construction (SCGB MK, BUY, TP: MYR1.74) which was awarded MYR1.4bn worth of jobs for the MRT2 project.
Other contractors, the research house said that could stand a chance to participate in MRT3 include IJM (IJM MK, NEUTRAL, TP: MYR1.66) and Malaysian Resources (MRC MK, NEUTRAL, TP: MYR0.38)
The minister told the media that the jobs will be awarded in the fourth quarter of this year and the massive infrastructure project, which is estimated to cost RM30 billion, consists of five main packages.
The five main packages are for two turnkey contractors for elevated works, one turnkey contractor for underground works, one for integrated rail systems, and one project management consultant to work alongside MRT Corp as the project developer. Tenders will be open in May, then awarded by 4Q22 in five packages over a period of 6-8 years.
RHB said that despite the latest active news flow on MRT3, concerns remain on the possibility of further delays in the rollout of tender packages.
It said that MRT3 would be financed via hybrid funding – which entails bonds including sukuk issuances, government guarantees and deferred payments.
“No mention was made on any private funding initiatives, but this should not be ruled out, given the country’s funding limitations. With that in mind, contractors are likely to bear some funding risks of the MRT3 project, should the private funding initiative be implemented,” RHB said.
