CGS-CIMB Research: Mega projects worth RM143b may be rolled over into Budget 2021

Contractors carry out construction work on the Pan Borneo Highway near Jalan Mawao Membakut in Membakut January 7, 2020. — Bernama pic
Contractors carry out construction work on the Pan Borneo Highway near Jalan Mawao Membakut in Membakut January 7, 2020. — Bernama pic

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KUALA LUMPUR, Oct 8 — Six mega-projects worth RM143.06 billion, announced under Budget 2020, may potentially be rolled over into the upcoming budget given the delays and tender disruptions caused by the Covid-19 pandemic and the movement control order, CGS-CIMB Research said.

In a note today, the research house said the projects included the Kuala Lumpur-Singapore High-Speed Rail (HSR), which is expected to cost RM68 billion, and the Mass Rapid Transit Line 3 or MRT3 (RM45 billion).

Others are the Penang Transport Master Plan (RM18 billion), Serendah-Port Klang Rail Bypass (RM8.3 billion), Johor Baru-Singapore Rapid Transit System (RTS) (RM3.16 billion) and Phase 1 of the Pan Borneo Highway (RM600 million).

CGS-CIMB pointed out that these potential mega-projects were likely be part of the Economic Recovery Plan (ERP) and the 12th Malaysia Plan (12MP).

“There has been greater engagement between the government and industry players on the MRT3 to potentially formulate a suitable model should the MRT3 be chosen as one of the key projects in 2021,” it said.

In another development, it said the expiry of the end-December review period for the Kuala Lumpur-Singapore HSR was unchanged.

However, CGS-CIMB remained optimistic about the potential outcome of the project, which may emulate the implementation model of the Johor Baru-Singapore RTS.

Meanwhile, the research house is staying ”neutral” on the overall construction sector at this time given the lingering political uncertainties and limited details on the sector’s recovery plans due to the reported delay in the announcement of the medium- to long-term ERP, previously targeted for this month, to December.

It said YTL Corporation Bhd and Malaysian Resources Corporation Bhd remained its preferred plays as they were likely earlier beneficiaries of the civil works package and the development of HSR’s terminus in Bandar Malaysia, respectively.

According to CGS-CIMB, IJM Corporation Bhd is a potential MRT3 beneficiary, given its past track record in securing larger value packages for MRT1 and MRT2. — Bernama

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