KUALA LUMPUR: The revival of Mass Rapid Transit (MRT) 3, at a reduced cost of RM45 billion, will be the next catalyst for the construction and building materials sector.
CGS International said in its report that there is a possibility for the MRT 3 to be included in Budget 2025 and subsequently rolled out next year.
MRT Corp announced on Friday that it is undertaking a revised public display for MRT 3. This will run for three months from Sep 2 to Dec 2, 2024 which CGS International believed was because of a proposed change in alignment that requires a new railway scheme.
There will be 35 designated locations, eight MRT information kiosks and 27 MRT information trucks at key sites for the public display exercise.
MRT 3 or the circle line spans 51 kilometres around the Kuala Lumpur city's perimeter and is designed to integrate with existing MRT, light rail transit, KTM, and Monorail lines through 10 strategically located interchange and connecting stations.
"While we believe the public display shows the government's intention to revive the MRT 3 project, the timeline remains uncertain for now," it said.
It said the government's estimated project cost for MRT 3 now is RM45 billion, which is reduced from RM68 billion in 2018.
The tender validity expired in March 2024 and CGS International believes the project will have to be re-tendered.
"We also do not discount private sector participation for funding which is in line with a statement on MRT Corp's website which states the project should incorporate private sector funding and non-government sources of payments.
"Overall, this ties in with our thesis that 2025 may be a better year for construction with a revival in government infrastructure and continuity in foreign direct investments from data centres, semiconductor factories and industrial warehouses."
It said the direct beneficiaries for MRT 3 may be Gamuda Bhd, YTL Corporation Bhd and HSS Engineers Bhd.
It reiterated its "Overweight" call on the sector due to expectations of strong project flows from data centres, semiconductor factories and industrial warehouses.
It also expects a revival in government infrastructure spending.