KUALA LUMPUR: CIMB Securities reaffirms its expectation that construction spending will see a rebound by the fourth quarter of 2024 (4Q24), driven by a mix of private and government-funded infrastructure projects.
In addition to the MRT 3, the government has already initiated the RM805 million award for Package 2 of the Kuching Urban Transportation System's (KUTS) Blue Line, granted to a joint venture between Pansar and China Road & Bridge Corp (CBRC).
This was quickly followed by Central Global receiving a RM616 million contract for Work Package 22 of Pan Borneo Sabah Phase 1B.
"We retain our Overweight stance on the construction sector,'' CIMB Securities said in a note.
MRT Corp has unveiled a revised public display for the MRT 3 project, which will run from this month to Dec 2, 2024.
It will be shown at 35 locations across the Klang Valley, including eight MRT Info Kiosks and 27 MRT Info Trucks situated at major sites.
The planned circle line will close the public rail loop in the Klang Valley. Altogether, it will have 39 km of tracks above-ground and 12 km underground. It will also have 32 stops, of which 22 will be elevated; seven will be underground; and another three will be provisional elevated stations.
MRT 3 will link up with the existing MRT services (Kajang Line and Putrajaya Line), LRT, KTMB, as well as monorail lines at ten key interchanges.
They are: two stations on the MRT Kajang Line (Bukit Kiara Selatan and Tmn. Midah); two stations on the MRT Putrajaya Line (Titiwangsa and Kuchai); two stations on the LRT Ampang Line (Pandan Indah and Titiwangsa); one station on the KL Monorail Line (Titiwangsa); two stations on the KTM Komuter Line (Pantai Dalam and Kompleks Duta); and one city bus station (BRT Sunway Line).
"All in all, we regard the public display as a reflection of the government's commitment towards the project. Apart from alignment issues, the government had previously communicated its intention to reduce the project's cost by at least 10 per cent to RM45 billion during the re-tabling of Budget 2023 in February 2023," CIMB Securities said.
Before this, the estimated cost for its construction works was around RM34 billion, it said.
It was reported in February 2023 that MRCB submitted the lowest bid for Package CMC301 (main depot works) at RM2.9 billion.
For Package CMC302, YTL Corp had reportedly put in the lowest bid at RM10.8 billion, followed by IJM Corp at RM11.8 billion.
As for the tunnel-heavy Package CMC303, it was reported that the leading contender was the MMC Corp-Gamuda JV, which had put in the lowest bid at RM13.3bn vs. IJM's RM13.8 billion.
Prior to the review, HSS Engineers was appointed by MRT Corp to undertake management consultancy services work for MRT 3 in August 2022. HSS' contract was worth nearly RM1 billion and is the only one among its five main packages that has been awarded.
Meanwhile, the pre-qualification exercise for the final package, involving the systems turnkey contractor (Package STC301), was called in September 2022.
"While it represents another step forward, we are neutral on this for now as the actual time scale to kickstart MRT 3 is not known yet as tender validity was last extended until March 2024.
"Rather, we believe that more clarity could emerge after the upcoming national budget in October 2024, especially on its exact funding mechanism," the research firm said.