PETALING JAYA: Sarawak could emerge as construction giant Gamuda Bhd
’s new domestic growth frontier.
This comes as Sarawak Energy Bhd’s (SEB) request for proposal (RFP) for five dams under the Cascading Power Sources (CPS) initiative draws interest from major contractors, including from Gamuda Bhd, Press Metal Aluminium Holdings Bhd, and companies from Japan, China and South Korea, according to reports.
Bidders have a six-month window to prepare their proposals, with submissions due by end-August 2026.
The dams are slated to commence commercial operations between 2034 and 2035.
RHB Research said Gamuda’s interest is not surprising considering its exposure to major Sarawak infrastructure projects such as the Pan Borneo Highway, Batang Lupar Bridge and Northern Coastal Highway.
The group is also involved in dam-related works including the Sabah Ulu Padas Hydroelectric project.
The five dams will be located in the central and northern parts of the state and near the Kalimantan border. The feasibility study (stage 1) is expected to begin in March, while the final investment decision and construction (stage 3) is targeted in the first quarter of 2028.
“While construction is set to begin only two years from now, we expect such projects to retain Gamuda’s footprint of local projects, which are of higher margins versus that of its overseas jobs,” RHB Research said in a report.
The research firm said based on its benchmarking exercise based on cascading dams in Europe and Vietnam, the cost per megawatt (MW) to invest in a cascading dam would be in the range of RM8mil and RM13mil per MW.
“The five basins identified for the CPS in Sarawak have a total potential capacity of between 1,550MW and 1,970MW and therefore, may translate to total minimum and maximum investments of RM12.4bil and RM25.6bil respectively, based on our estimates.”
It noted that the state’s current generation capacity is 5.9 gigawatt (GW) and is on track to achieve 10GW by 2030.
A 15GW of total generation capacity is required by 2035 while maintaining at least 60% from renewable energy (RE) sources.
In 2025, hydropower made up 3.6GW or 60.4% of Sarawak’s generation capacity, while by 2035, this is expected to rise to 5.8GW.
“As such, 12 river basins with CPS potential (totalling 3GW of capacity) have been identified, with the current focus being on the five river basins highlighted in the RFP,” it added.
On Bursa Malaysia, Gamuda’s shares traded higher by 2.65% yesterday to RM4.26 at the time of writing. The stock is currently trading at about 18 times its FY2027 price-to-earnings (PE) multiple, slightly above the 16 to 17 times PE recorded by the Construction Index during the 2016 to 2017 construction upcycle.
“We still favour Gamuda for its diversified RE ventures – solar, onshore wind farms, hydroelectric dams, and potentially pumped hydro projects – which should continue mitigating any slowdown in transportation infrastructure projects,” said RHB Research, which ascribed a RM6.26 target price on the stock and kept its “buy” call.
