Government approval of the financing plan for the Klang Valley Mass Rapid Transit Line 3 (MRT3) project is expected by early-2022, with the tender coming out in April.
Affin Hwang Capital, which hosted MRT Corp for a virtual meeting with institutional investors and listed companies’ management recently, said the MRT3 construction cost could be similar to MRT2 since the underground portion is similar in length.
The revised construction cost of MRT2 was RM30.5 billion.
Affin Hwang also said IJM Corp Bhd, Sunway Construction Group Bhd (SunCon) and Gamuda Bhd would have competitive advantages in bidding for the MRT3 project.
This is due to their proposed private funding initiative (PFI) to partially finance the project.
“Details of the PFI portion were not disclosed as the proposal is still subject to the approval of the government. The private funding could involve an SPV for equity investment in the MRT3 project, contractor financing for the first few years of construction up to 2023 for the MRT3, and transport-oriented developments along the entire MRT1-3 network.
Affin Hwang said the opening of the MRT2 Phase 1 (Kwasa Damansara-Kampung Batu stretch), originally scheduled to start operations in November, had been delayed to at least the second quarter of 2022.
It said the revised opening timeline was due to two out of hundreds on-system modules being implemented for the autonomous rail line requiring further refinement.
The MRT2 Phase 2 (Kampung Batu-Putrajaya Sentral stretch) opening is on track to open in January 2023.
According to MRT Corp, the construction of Phase 2 was currently about 94 per cent complete, it added.
Affin Hwang has reiterated its “Overweight” call on the construction sector on improving order replenishment prospects.
The firm’s top “Buy” are Gamuda, HSS Engineers Bhd, SunCon, Gabungan AQRS Bhd and IJM.
“Property developers under our coverage with transit oriented development projects near proposed and existing MRT stations likely will also benefit, such as Malaysian Resources Corporation Bhd, Sunway Bhd and UOA Development Bhd,” it said. – NST ONLINE
