UOB Kay Hian noted that post the 14th General Election (GE14) that saw Pakatan Harapan (PH) taking over the Federal Government, most construction and highway-concession related stocks have tumbled significantly, besieged by concerns of potential cancellation/deferment of some mega projects, contract renegotiation of ongoing mega projects, and toll road concessionaires being compromised.
THE construction sector, which has been volatile over the last few weeks, has now calmed down after the government announced that it is proceeding with the light rail transit 3 (LRT3) project and the Klang Valley Mass Rapid Transit (MRT2), but at a reduced cost.
What stands out is that both these projects will be remodelled from a project delivery partner (PDP) model to a fixed-price contract regime.
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