CIMB Research cautious on construction as HSR, ECRL under review

DUNGUN, 27 Mac -- Kerja-kerja membina terowong bagi projek Laluan Rel Pantai Timur (ECRL) Seksyen 4 sedang giat dijalankan ketika lawatan pemberita di tapak pembinaan berkenaan di Bukit Bauk hari ini.ECRL ialah projek berimpak tinggi dibawah Rancangan Malaysia Ke-11 (RMK11) yang akan menyaksikan pembinaan laluan rel yang bakal menghubungkan negeri-negeri Pantai Timur dengan Lembah Kelang.Sekurang-kurangnya 44 terowong sedang dibina di beberapa kawasan sepanjang pembinaan ECRL sejauh 688 kilometer itu.--fotoBERNAMA (2018) HAK CIPTA TERPELIHARA

KUALA LUMPUR: CIMB Equities Research is underweight on the construction sector as it sees pessimism brewing for Gamuda, YTL Corp and MRCB as the new federal government reviews the large-scale construction projects.

It said on Wednesday the three listed contractors were awarded the High Speed Rail (HSR) project delivery partner (PDP) scope. 

Lafarge, meanwhile, may be at risk for earlier having secured a two-plus-two-year contract to supply cement for East Coast Rail Link (ECRL), valued at RM270mil.   

Apart from the sheer value of the projects, key members of the administration have been reportedly questioning the projects’ viability. 

CIMB Research said the Pakatan Harapan (PH) government had also singled out the ECRL, due to the political baggage it carries and the financing terms that were deemed detrimental to the government’s balance sheet. 

“News of PH making good on its promise to review all mega projects would heighten the risk to the construction sector. 

“The government also seems to be weighing the option of scrapping some projects. Maintain sector Underweight. We foresee more details on PH’s prudent new infra rollout plans in the upcoming Budget 2019,” it said.