WHOPPING ORDER BOOK

Group to get boost following nod for rail and power plant projects, say analysts

THE government’s decision to go ahead with the Gemas-Johor Baru electrified double-tracking rail project and a RM4 billion Indonesian power plant job is set to fuel YTL Corp Bhd’s order book to a staggering

RM12 billion, says MIDF Research.

YTL Corp Bhd’s order book is expected to swell to a whopping RM12 billion from RM400 million currently. This will be buoyed by the government nod to proceed with the Gemas-Johor Baru electrified double-tracking railway project and a RM4 billion job to build a power plant in Indonesia, said analysts. MIDF Research estimates YTL’s share of the electrified double-tracking contract at RM8 billion and said there is a possible expansion of the project.

The project has progressed about 20 per cent.

Following a recent meeting with the Johor government, the Transport Ministry announced that the double-tracking project would proceed as scheduled.

MIDF Research analyst Hafriz Hezry said the project could be expanded with additional stations.

The project involves 197km of double tracks with 12 stations, electric trains, depots, land viaduct, bridges, electrification and signalling systems.

It is scheduled for completion in October 2021.

“We had, post-elections, conservatively excluded the GemasJohor Baru double-tracking project from our forecasts given the government’s intention to review major construction projects. The latest development is positive for YTL.

“The addition of the GemasJohor Baru project on top of construction of the group’s Tanjung Jati power plant in Indonesia will provide a massive expansion to the group’s order book,” said Hafriz in a report yesterday.

He estimated both projects to enhance YTL’s group earnings by 19 per cent next year and 26 per cent in 2020.

The Tanjung Jati project is estimated to cost US$2.7 billion (RM11 billion), including land relocation cost and capitalised interest.

The project’s engineering, procurement, construction and commissioning value is estimated at RM4 billion and is expected to be undertaken by YTL’s construction arm.

Construction is expected to kick off early next year.

YTL is said to have cleared a major hurdle for its 80 per centowned power plant, having finalised power purchase agreement (PPA) terms with the regulators.

Tanjung Jati is a 1,320megawatt coal power plant scheduled for commercial operation in 2021, with a 30-year PPA deal up till 2051.

Yesterday, on Bursa Malaysia, YTL closed unchanged at RM1.35, with 9.47 million shares traded.