MRT3 announcement keeps construction players busy till 2030 -- MIDF Research

KUALA LUMPUR, March 16 (Bernama) -- The Mass Rapid Transit 3 (MRT3) line announcement is expected to keep construction players busy for the next eight years until 2030 with strong order book replenishments, whilst providing them with the earnings visibility.

MIDF Amanah Investment Bank Bhd research arm (MIDF Research) said the announcement was a timely fillip for the rather muted construction sector where most firms were all dressed up with nowhere to go in recent years. 

Yesterday, Transport Minister Datuk Seri Dr Wee Ka Siong announced that the MRT3 tender process for five turnkey contract packages -- four construction contract packages and one project management contract, would begin in May this year.

The four construction packages comprise two packages for elevated works, one for underground works and one for the integrated rail system.

"The tenders are expected to be awarded by the fourth quarter of 2022 (Q4 2022), which is a positive development for the sector," MIDF Research said in a note today.

While there could potentially be delays in the roll out of the project due to multiple factors, MIDF Research believes that the improving inflow of jobs, domestically and overseas, would be able to keep most of the construction companies under its coverage engaged until they are able to start reaping the fruits of MRT3.

Overall, MIDF Research maintains its "positive" recommendation on the construction sector on the back of its optimistic outlook and economic recovery play, especially with MRT3 ready to kick off soon.

"Our optimism is also strengthened through the government’s commitment to review and potentially revive previously canned projects such as the Kuala Lumpur-Singapore High-Speed Rail (HSR) which will see the Ministry of Transport engaging its Singapore counterpart in Q2 2022," it said.

The research house also takes note on the recent announcement by the Melaka government that it has long-term plans to build an undersea tunnel for a rail system network linking Melaka and Dumai in Sumatra, Indonesia, although this is not exactly a new idea.

"Something similar was mooted years back, believed to be 1995, for a bridge connecting Melaka and Dumai, but this was placed in the back burner due to the Asian Financial Crisis in 1997-1998.

"The project resurfaced in 2009 but there were no developments after that," it said.

-- BERNAMA