Penang’s RM27bil impact, property companies to benefit from masterplan

The Penang transport Master Plan is set to improve accessibility and spur further gains in the state

PETALING JAYA: Major construction and property players with projects in Penang are set to be major beneficiaries of the state government’s RM27bil transport masterplan.

The Penang Transport Master Plan (PTMP) is set to improve accessibility and spur further gains in its vibrant property market, said AmResearch in a report yesterday, adding that the Government’s various initiatives would create significant infrastructure opportunities for Malaysian contractors.

“Indeed, the spotlight will turn to the balance RM20bil of major infrastructure works being lined up within Penang over the next 25 years.”

The research house pointed out that the first component – the RM6.3bil Penang undersea tunnel project – was awarded to the Zenith-BUCG Consortium last October, with feasibility studies and detailed design works to be completed by end-2015.

“The state government’s preferred approach is to appoint a project delivery partner (PDP) to co-ordinate the entire project. The request for proposals have attracted about 50 suitors to-date and will close next February.

“This will be quickly followed by the contract award in six months’ time (by the third quarter of 2015), as physical work on the PTMP is scheduled to start by 2016.”

Given the huge financial and technical requirements, AmResearch is of the view that the bidders will likely form consortiums to strengthen their chances, which include tie-ups with international contractors of repute.

“Among the pack, we believe Gamuda Bhd has the upper hand over its rivals.”

The research house said Gamuda already possessed the necessary track record in handling mass rapid transit (MRT) jobs.

“It is the PDP and tunnelling contractor for the Klang Valley MRT Line 1, and was recently appointed as the PDP for the MRT Line 2 as well.”

AmResearch added that Gamuda had the balance sheet strength and relevant expertise in handling tunnelling works, such as the Klang Valley MRT 1, Kaohsiung MRT and SMART Tunnel.

Malaysian Resources Corp Bhd, the research house said, was another beneficiary. “Its proposed Penang Sentral development (approved by the state government in September) is set to be the main transport hub for Penang and the northern region of Peninsular Malaysia.

“Phase 1, with a gross development value (GDV) of RM512mil, consists of a transport hub, terminal and retail mall.

“While not directly under the PTMP, Penang Sentral certainly complements the state government’s transport improvement agenda. This suggests more upside to the entire project’s initial GDV estimate of RM2bil.”

The imminent roll-out of the masterplan is also a timely boost for IJM Land Bhd’s “The Lights” in Jelutong, as it moves to launch the commercial components under Phase 2, which has a GDV of over RM6bil, said AmResearch.

While the opening of the Second Penang Bridge in March is expected to bode well for the remaining phases of Mah Sing Group Bhd’s Southbay City, which has a GDV of around RM2.7bil.