MRT3 Construction Work Expected To Start At End 2024

The 2023 budget that will be presented again on 24 February is expected to usher in the momentum of re-entering the work flow of the construction sector, with high expectations that the Mass Transit Transit 3 (MRT3) project will finally be officially started.

CGS-CIMB analyst, Sharizan Rosely, said the MRT3 project is currently waiting to see whether it will use a hybrid financing model or the government will instead switch to a deferred payment scheme by issuing bonds through DanaInfra Nasional Bhd.

“In both cases, we expect MRT3 civil works to start in late 2024, which is about nine to 12 months after the civil works contract is potentially awarded, which is likely in the second quarter or second half of this year.

“This is to pave the way for the land acquisition process which is still in the early stages,” he said through a research note.

The Ring Line MRT3 is said to be the last important part of completing the urban rail network in Kuala Lumpur, with a 50.8 kilometer line running along the perimeter of the city.

The MRT3 will go around Kuala Lumpur and pass through high-density areas including Setiawangsa, Titiwangsa, Mont Kiara, Pantai Dalam and Pandan Indah.

The proposed alignment can be viewed through the MRT Corp website. However, the alignment has not been finalized and no further details have been provided regarding the exact location of the route.

Further details on the line-up have not been disclosed even though MRT Corp has issued a tender for the project management negotiation contract (PMC) in addition to the civil construction package.

In August last year, MRT Corp appointed joint venture entities HSS Integrated Sdn Bhd and HSS Engineering Sdn Bhd for the PMC package worth RM997.9 million.

Meanwhile, the deadline for submitting the turnkey system contract has been extended until the middle of this month.

Following the progress of the project, some groups requested that the authorities hold a dialogue session to discuss some issues involving the alignment before it is approved.

It follows reports that many land owners and house owners are wondering about the actual alignment of MRT3, because they have been given a notice by the Land and Mines Department about the possibility that their property will be taken.

Meanwhile, Sharizan said infrastructure contracts awarded last year decreased by two percent compared to 2021, due to the absence of new large-scale projects other than MRT2 which is almost completed, in addition to the postponement of several contract tenders due to the 15th General Election (GE15) in the quarter fourth 2022.

He said, ahead of the presentation of Budget 2023, CGS-CIMB maintains a ‘neutral’ rating for the construction sector with one of the main themes being the potential awarding of a large MRT3 package.

“Gamuda remains our top pick for the sector because its regional strategy is ahead of other contractors, while IJM Corp is a large-cap sector with special dividend potential.

“HSS Engineers offers attractive risk at current levels with contract acceptance expected to increase in the second half of 2023,” he said.

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