AmWatch - Construction Sector : RM20bil kicker from 7 new highways OVERWEIGHT, 19 Sep 2014

SECTOR FOCUS OF THE DAY

Construction Sector : RM20bil kicker from 7 new highways           OVERWEIGHT

The Star reported today that seven new highways worth a combined RM20bil are expected to kick off by next year. They are: Duta-Ulu Klang Expressway (DUKE) – RM1.2bil; West Coast Expressway (WCE) – RM5bil; Kinrara Damansara Expressway (KIDEX) – RM2.5bil; Kuala Lumpur  Outer Ring Road (KLORR) – RM1.1bil; Damansara Shah Alam Expressway (DASH) – RM4.2bil; Sg.Besi-Ulu Kelang Elevated Expressway (SUKE); and Serdang-Kinrara-Putrajaya (SKIP).

Quoting Works Minister Datuk Fadillah Yusof, The Star report added that most of these projects are in the process of seeking approvals from the state authorities and relevant bodies. Public feedback is also being sought. We understand that the proposed DASH and KIDEX projects are in the process of seeking public approval, as well as final approval from the state.

Nevertheless, among the seven new highways – we believe that progress on the WCE appears to be at an advanced stage. Approvals from the Perak side are believed to have been virtually cleared, while there could be some re-adjustments to the alignment on the Selangor end following public consultation.

In May, IJM Corp was appointed as the contractor to undertake Sections 3, 4, 5, 8 and 9 of the WCE at a combined cost of ~RM2.8bil. We also expect IJM to be in the running for select packages under the second portion (Sections 1,2, 6, 7, 10 and 11) that is to be awarded on an open tenderbasis. The estimated combined sum of these packages is ~RM2.2bil.   

After a lull over the last few months, we expect these new highways – if approved – to re-galvanise the local construction industry. Furthermore, we expect more concrete newsflow on the Klang Valley MRT2 line to unfold by year-end where the MMC-Gamuda JV could once again be in the drivers’ seat. Any renewed construction prospects would also be positive for suppliers of building materials, i.e. Lafarge Malaysia, Ann Joo Resources and Lion Industries.  

Others :

Economic Update : BNM keeps interest rate at 3.25%

NEWS HIGHLIGHTS

Malaysian Airline System : Outplacement centre for redundant MAS staff

Construction Sector : Seven highways worth RM20bil expected to start work next year

Media Sector : DTT rollout on track, with tenders to close mid-Oct