Pan Borneo awards support S’wak’s construction
KUCHING: The recent contract awards for the Pan Borneo Highway will continue to support construction activities in Sarawak.
Analysts remain sanguine on the construction sector as they expects more contract flow to be announced in the second half of the year (2H16).
AmInvestment Bank Bhd (AmInvestment Bank) in a report yesterday remains ‘overweight’ on the construction sector on the back of continued construction tenders or potential contract awards for major infrastructure projects such as Pan Borneo, Mass Rapid Transit Line 2 (MRT2), Light Rail Transit Line 3 (LRT3), Sungai Besi-Ulu Kelang Elevated Expressway (SUKE) and Damansara-Shah Alam Highway (DASH).
The research firm believed awards for the LRT3 are expected to begin in two to three months’ time with approximately RM7 billion worth of packages remaining for MRT2.
AmInvestment Bank opined that the middle and long-term prospects of the construction sector will be supported by major projects such as Bandar Malaysia, Tun Razak Exchange (TRX), Bukit Bintang City Centre (BBCC), Johor-BahruGemas electrification double tracking project and the MalaysiaSingapore high-speed rail projects in Peninsular Malaysia.
As for Pan Borneo Highway Sarawak, it expects awards for the remaining packages to be announced soon.
Companies which are still eyeing for the remaining packages include the joint venture between Naim Holdings Bhd-Gamuda Bhd; Musyati Sdn Bhd-Mudajaya Group Bhd; Sarawak Construction Sdn Bhd-Sunway Construction Group Bhd; APPL Engineering Services Sdn Bhd-Mitrajaya Holdings BhdEmas Synergy; TRC Synergy-Endaya Construction Sdn Bhd-Pembinaan Kuantiti Sdn Bhd; KACC Construction Sdn Bhd-IJM Corporation Bhd-Pembinaan Emas; Ikhmas Jaya Group Bhd-Titanium Group and Anggun Diversified Sdn Bhd-Malaysian Resources Corporation Bhd.
Earlier on Monday, the joint venture between Cahya Mata Sarawak Bhd and Bina Puri Holdings Bhd announced that they have been awarded a work package of the Pan Borneo Highway from Sg Awik Bridge to Bintangor Junction worth RM1.36 billion.
Subsequently on Tuesday, the joint venture between KKB Engineering Bhd and WCT Holdings Bhd also revealed that the they have been awarded a work package of the Pan Borneo Highway worth RM1.29 billion.
As of July 26, a total RM7 billion worth of contracts for Pan Borneo Highway have been announced since April 2015 with another six packages worth RM9 billion to be announced in the near future, AmInvestment Bank said.
The research firm noted the 1,089 kilometre (km) Sarawak portion of the Pan Borneo Highway reportedly costs RM16.4 billion.
It also noted the construction costs of the toll-free highway will be financed by a RM13 billion sukuk by DanaInfra Nasional Bhd with a further RM5 billion from the state’s development expenditure.
The sukuk will be issued in two batches, one in August and the second batch in September.
Additionally, AmInvestment Bank said including the the Sabah portion of the Pan Borneo Highway, the entire highway project costs RM29 billion.
Borneo Highway PDP Sdn Bhd is the project delivery partner (PDP) for the Sabah portion which could costs RM12.8 billion.