KUALA LUMPUR: LOCAL contractors may handle at least 20-30 per cent of the civil works for the RM55 billion East Coast Rail Link (ECRL) project through selective bidding process, said analysts.
They named Gamuda Bhd, IJM Corp Bhd, Gabungan AQRS Bhd, WCT Holdings Bhd, WZ Satu Bhd and Fajarbaru Builder Group Bhd as those which could be vying for the subcontracts.
HSS Engineers Bhd, meanwhile, could win detailed design contract for the project that spans 688km, according to Affin Hwang Capital Research.
“Local contractors could be appointed as subcontractors to do at least 30 per cent of the civil works worth about RM16.5 billion,” said Affin Hwang.
Analysts expect the tenders to be called by year-end or early next year.
Prime Minister Datuk Seri Najib Razak will officiate the project’s ground-breaking ceremony in Bandar Baru Kuantan, Pahang on August 9.
“The RM55 billion ECRL is expected to take off in the fourth quarter of 2017 with China Communications Construction Co Ltd (CCCC) appointed as the main contractor and financing from the Chinese government secured,” said Affin Hwang.
Affin Hwang noted that Gamuda was negotiating for a subcontract direct from CCCC as the former has a strong track record in railway construction, following the completion of the RM12.3 billion Ipoh-Padang Besar double-tracking project.
MIDF Research analyst Fadhli Dzulkifly said Gabungan AQRS and IJM would be strong contenders due to their presence in Kuantan.
“Those companies have transport-oriented development (TOD) stations and building construction as well as civil and earthworks expertise,” he told NST Business yesterday.
Fadhli said the ECRL tender is expected to be in the first quarter of next year, with a 30:70 development ratio between local and foreign contractors.
He believes the bulk of the ECRL’s portion would be given
to state-owned enterprises like CCCC, while the subcontractors could be like China Railway Group Ltd and China Railway Construction Corporation (CRCC).
Meanwhile, Public Investment Bank Bhd expects local contractors to get at least 20 per cent of the portions in the ECRL project.
It said there was no indication from the government on how much it will go to the local contractors.
“Our meeting with the local contractors indicated about 20 per cent of the project to given to the locals,” said a PublicInvest analyst.
Kenanga Investment Bank Research said there are high chances of more than 30 per cent participation from the local contractors.
“If Gamuda takes the sub-contractor job, it will be confirmed more portions for the local contractors to participate. The ratio could be more than 30 per cent due to vast expertise in Gamuda as there is something other contractors have not expressed their interest in participating in sub-con level,” it added.