‘CMS will not be affected by potential change to Pan Borneo Highway execution’
KUCHING: Cahya Mata Sarawak Bhd (CMS) will not be affected by any potential change to the project execution of Pan Borneo Highway based on the project delivery partner (PDP) model.
AmInvestment Bank Bhd (AmInvestment Bank) believed that CMS, being a work package contractor (WPC) for the RM1.36 billionSgAwik-Bintangorjunction stretch of the Pan Borneo Highway – via 70:30 joint venture with Bina Puri Holdings Bhd – will not be affected by the potential change to the project’s execution based on the PDP model.
“This is because there has not been talks on potential reduction of scope for the project (unlike the MRT2 and LRT3) and CMS, alongside with other WPCs for the project, have secured their work packages on highly competitive bids, leaving themselves little room for excessive profits,” the research firm said.
“At present, CMS’ package is 30 per cent completed.”
Overall, AmInvestment Bank remained cautious on CMS due to the cutback in public infrastructure spending as the federal government tightens its belt.
“We are also mindful of the potential threat to the market dominance of existing players in the construction and building material sectors in Sarawak on an altered political landscape in Malaysia post the 14th general election.
“Increased competition could put a dent on CMS’ prospects of winning new construction jobs, securing extensions or its road maintenance concessions, as well as sustaining high margins for its construction, road maintenance and cement businesses.”