Previous winners to be strong contenders for HSR


  • Construction Premium
  • Thursday, 19 Dec 2019

Suncon

PETALING JAYA: Companies that secured Kuala Lumpur-Singapore High Speed Rail (HSR) work packages before the project was suspended last year remain strong contenders for the jobs, if the project is revived.

Analysts said previous winners of the role of project delivery partner (PDP) and other big players which had bid for the role could be potential beneficiaries of the project.

Under the previous regime, the PDP roles for the northern portion (Bandar Malaysia station to Melaka station) were secured by MRCB-Gamuda JV while the southern portion (Johor) was clinched by a YTL-TH Properties JV.

HLIB Research noted that while these previous PDP winners remain frontrunners to secure contracts, it expected IJM Corp and Sunway Construction Group (SunCon) to emerge as stronger contenders this time around.

This, it said, was as both players had strong financial capacity and would be able to materially benefit from the shift towards an open tender system.

HLIB Research noted that IJM Corp and SunCon had previously formed a four-party consortium to participate in PDP tenders but were unsuccessful in their bid at the time.

The research house said that while it was too early to pin-point potential work package winners, it expected construction players such as IJM Corp, SunCon, WCT Holdings, Gabungan AQRS, TRC Synergy, Ahmad Zaki, Mudajaya, MALAYSIAN RESOURCES CORP (MRCB) and Gadang Holdings to actively bid for a slice of the pie.

Prime Minister Tun Dr Mahathir Mohamad said on Tuesday that talks on the resumption of the HSR project may happen next year.

He told reporters that the government hoped to reduce the cost of the project, and one way to do this is by reducing its speed from 400km/h.

In December 2016, the Barisan Nasional administration signed a bilateral agreement with Singapore to build a 350km high-speed railway, linking Kuala Lumpur and Singapore, with an estimated cost of RM110bil.

However, the project was later temporarily suspended by the Pakatan Harapan government, citing high costs.

Another analyst from a local brokerage agreed that companies that had secured work packages during the last round would be strong contenders this time as well. “The construction players that had secured the PDP role are likely to be the first to be considered if the project takes off once again, ” he said.

He added that the revival of the project would be very positive for the sector and would boost overall investor sentiment towards the country.

Last month, Fitch Solutions Macro Research noted that there was a higher chance of a revival of the HSR project, in view of the planned new economic corridor stretching from Kuala Lumpur to Johor.

The research house said the economic corridor would likely run parallel to the proposed alignment of the HSR project, and as such, “boost the HSR business case and present tailwinds to its implementation”.

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