YTL to gain should KL-Singapore HSR pull through
KUALA LUMPUR: YTL Corporation Bhd (YTL) is pegged to be a beneficiary should the High Speed Rail (HSR) project between Kuala Lumpur and Singapore be revived.
This comes as reports of Prime Minister Tun Dr Mahathir Mohamed indicating that Malaysia was exploring proposals to reduce cost of the HSR project, which could mean a potential revival of the project.
The team at MIDF Amanah Investment Bank Bhd (MIDF Research) saw that YTL was previously appointed as one of two project delivery partners (PDP) for the now deferred project, submitting a bid for the role back then via a 70:30 joint venture with TH Properties Sdn Bhd.
The other consortium appointed for the PDP role previously was MRCB-Gamuda.
“YTL-TH Properties was selected for the southern portion of the alignment (Johor portion) and MRCB-Gamuda for the northern
YTL is backed by a solid track record given involvement in the construction and operation of the RM2.4 billion Express Rail Link (ERL) project which was also one of the cheapest that has been rolled out nearly two decades ago at just RM42 million per kilometre. MIDF Research
portion (KL to state border of Melaka-Johor),” the research arm recapped.
“YTL is backed by a solid track record given involvement in the construction and operation of the RM2.4 billion Express Rail Link (ERL) project which was also one of the cheapest that has been rolled out nearly two decades ago at just RM42 million per kilometre.”
Right now, YTL’s orderbook is estimated at about RM8 billion comprising mainly of the Gemas-Johor Bahru Double Tracking project which MIDF Research said was not impacted by the PH government’s review of infrastructure projects in the past eight months.
Meanwhile, the construction of YTL Power’s Tanjung Jati coal power plant in Indonesia was supposed to add an estimated RM4 billion, but progress on the financial close of this project has been delayed, presumably given the upcoming Indonesian elections.
“A potential revival of the HSR project is a catalyst for YTL’s construction division -- construction currently accounts for three per cent of group pretax earnings -- while construction earnings has seen progressive improvement in recent quarters given progress in the Gemas-JB Double tracking project,” MIDF Research estimated.