Gamuda the biggest winner in MRT 2 job

PETALING JAYA: The MMC Corp Bhd and Gamuda Bhd joint-venture (JV), which will carry out the second mass rapid transit line (MRT2), will stand a higher chance of clinching the underground works for the project, according to analysts.

The MMC-Gamuda JV was selected as the project delivery partner (PDP) by Mass Rapid Transit Corp Sdn Bhd on Wednesday to carry out the MRT2 project from Sungai Buloh to Putrajaya through Serdang.

MIDF Research said the appointment was timely, as the project would renew Gamuda’s depleting orderbook of RM2bil.

It expected the JV to secure the tunnelling package estimated at between RM8bil and RM9bil.

“The amount is expected to be slightly higher compared with Line 1, as more underground stations will be built for Line 2,” MIDF said in a report.

Gamuda shares closed 10 sen or 2% higher yesterday at RM5.09, with 17.69 million shares being traded, while MMC Corp Bhd shares closed one sen lower at RM2.51.

“As the MRT Line 1 work progress is approaching its tail-end, the deployment of equipment and manpower for Line 2 may commence in the second half of next year,” MIDF said.

The MRT2 project is estimated to cost RM23bil, as highlighted in Budget 2015. Tenders are expected to be called late next year, with major contracts to be awarded from mid-2016 onwards.

“Based on its original proposal, MRT2 will span 56km, of which 45km will be elevated (27 stations) and 11km underground (eight stations),” said Hong Leong Investment Bank (HLIB) Research in a note to clients.

The research house expects MRT2 to gain more traction in the coming months for the official signing of the PDP agreement by year-end or early 2015, pre-qualification in mid-2015, tendering in the fourth quarter of 2015 and initial contract awards in the first quarter of 2016.

“The resolution of the Selangor water saga will be an added catalyst,” HLIB Research said.

Meanwhile, CIMB Research said it was upbeat on Gamuda as the biggest beneficiary of the project to lock in about RM5bil in tunneling works.

It added that if Gamuda was granted a PDP fee of 6% for MRT2 (similar to MRT1), it would translate into RM900mil in total PDP fees derived from the estimated RM15bil value of above-ground works to be realised over a four to five-year period.

“We expect a continued steady re-rating on the back of this news, and also positive expectations of renewed talks on the water takeover side, particularly, after the new Selangor Mentri Besar took office,” it said.