In­fra­struc­ture jobs to sup­port con­struc­tion sec­tor or­der book re­plen­ish­ment

The Sun (Malaysia) - - SUNBIZ -

PETALING JAYA: With con­struc­tion jobs from the prop­erty sec­tor stay­ing sub­dued, the in­fra­struc­ture sec­tor will sup­port the con­struc­tion sec­tor’s or­der book re­plen­ish­ment in the cur­rent year and into 2017, ac­cord­ing to May­bankIB Re­search.

It said in­fra­struc­ture job awards in the first half of 2016 (1H16) came to RM30 bil­lion, ac­cord­ing to sta­tis­tics by the Con­struc­tion In­dus­try Devel­op­ment Board. This has ex­ceeded the value for the whole of 2015, of RM26 bil­lion. The RM30 bil­lion should in­clude RM23 bil­lion worth of Klang Val­ley Mass Rapid Tran­sit 2 (KVMRT 2) jobs.

“We es­ti­mate the to­tal in­fra­struc­ture award value has climbed fur­ther to­wards the RM40 bil­lion mark by now, in­clud­ing Sun­gai Besi-Ulu Ke­lang El­e­vated Ex­press­way (SUKE) and Da­mansara-Shah Alam El­e­vated Ex­press­way (DASH). Whether 2016 will be another record year will de­pend on whether sub­stan­tial of the KVLRT 3 jobs will be awarded this year, or next. What is of real im­por­tance is that the pace of job awards con­tin­ues to roll, im­ply­ing de­liv­ery com­mit­ment by the stake­hold­ers,” May­bankIB said.

It added that there are still the re­main­ing pack­ages of the KVMRT 2 (es­ti­mate over RM5 bil­lion), Pan Bor­neo Sarawak High­way (RM11 bil­lion) and West Coast Ex­press­way (RM2 bil­lion), be­sides the KVLRT 3 (RM9 bil­lion), into 2017.

Be­yond 2017, the Kuala Lumpur to Sin­ga­pore High Speed Rail (RM70 bil­lion) will be the sin­gle largest in­fra­struc­ture project. A study on the KVMRT 3 (Cir­cle Line) has also started pos­i­tively. Other rail re­lated com­mit­ments are the Ge­mas-Jo­hor Baru dou­ble track rail (RM7 bil­lion) and East Coast Rail, the lat­ter will help sup­port the devel­op­ment of Kuan­tan Port.

In 1H16, the gov­ern­ment’s gross devel­op­ment ex­pen­di­ture (GDE) to­talled RM20.1 bil­lion, meet­ing 45% of the re­vised al­lo­ca­tion of RM45 bil­lion-RM46 bil­lion for the year (re­vised dur­ing Bud­get 2016 Re­cal­i­bra­tion at end-Jan­uary 2016). The RM45 bil­lion for 2016 how­ever, makes up just 17% of the RM260 bil­lion GDE un­der the 11th Malaysia Plan.

“We ex­pect a higher GDE al­lo­ca­tion for 2017 – this may al­low con­struc­tion of some other pub­lic trans­porta­tion projects like the KLKlang BRT line to start,” said May­bankIB.

It re­mains pos­i­tive on the con­struc­tion sec­tor and its top buy pick is Ga­muda Bhd, fol­lowed by Sun­way Con­struc­tion Group Bhd.

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