KUALA LUMPUR: The Mass Rapid Transit 3 (MRT3) Circle Line in the Klang Valley’s construction cost could be between RM35bil and RM40bil, assuming 40km total alignment or 70% underground, says CIMB Equities Research.
It said on Thursday this is also based on RM1bil cost/km for the underground portion (benchmarked against MRT 2) and RM500mil cost per km for the above-ground portion.
“Maintain sector Overweight. Downside risks are election/political risks, project delays and funding difficulties.
“While sector beneficiaries of rail contracts are broad-based, Gamuda remains our top big-cap rail play and it could emerge as the biggest winner of the RM55bil East Coast Rail Link (ECRL) and LRT 3 underground scope in 2H17 and MRT 3 in 2018,” it said.
CIMB Research quoted a local news report that the government may speed up construction of MRT 3 ahead of its planned completion in 2027 to reap the economic benefits of the project.
Transport Minister Datuk Seri Liow Tiong Lai was quoted saying the proposition was being discussed and Prime Minister Datuk Seri Najib Tun Razak was receptive to the idea.
"We have planned to complete MRT2 in 2024 and MRT3 in 2027, but looking at the benefits that we can reap from the MRT projects, the ministry has proposed to see whether we can bring forward the completion of MRT3 from 2027.
“We can start planning now, because the implementation will take five years. It's already 2017 and we don't need to wait another 10 years," Liow was quoted saying.
He added: "The prime minister is quite agreeable to the plan to bring it forward, but we will leave the details to the EPU (Economic Planning Unit), SPAD (Land Public Transport Commission) and the Prime Minister's Office.”
CIMB Research said this news is a positive surprise as it had expected more updates on the progress of MRT 3 post the announcement of Budget 2018 in October.
“Based on our latest checks, the full feasibility studies, including the proposed railway scheme, have largely been finalised. However, no cost estimate and alignment distance were revealed.
“We also understand that due to the coverage area of MRT 3, which will largely be within KL city, at least 70% of the alignment needs to be constructed underground,” it said.
The research house said MRT 3 is a circle rail line that will connect and integrate not only with the MRT Sungai Buloh-Kajang ine (MRT 1, in operation; RM21bil cost) and the MRT Sungai Buloh–Serdang–Putrajaya line (MRT 2, under construction; RM32bil cost) but also with all other urban rail systems, including the LRT and monorail.
“We understand that this milestone is targeted to be achieved by mid-2018. It will then take at least another six months from Cabinet approval to project awards.
“MRT 3 will be the rail story for 2018. We believe MRT 3 could be completed two years earlier than the 2027 original completion target,” said the research house.
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