KUCHING: Gamuda Bhd (Gamuda) will likely benefit from the upcoming contracts award for the tunnelling portion of Mass Rapid Transit Line 2 (MRT2).
Analysts were positive on the chances of the construction company securing some of the work packages for the infrastructure project which could see contracts award soon.
Following a company’s briefing, analysts gathered that contracts award for MRT2 work packages especially tunnelling works could be just around the corner.
The research arm of Hong Leong Investment Bank Bhd (HLIB Research) in a report, noted the tunnelling contract for MRT2 could be awarded within the next two weeks.
It observed the underground portion for MRT2 will span across 13.5 km, 42 per cent longer than MRT1.
As a result, it noted the contract sum for MRT2 will be higher at an estimated RM12 billion as compared to MRT1 of RM8 billion.
The research firm gathered that the MMC-Gamuda joint venture (JV) along with three foreign consortiums are contending for the job.
It opined that the MMC-Gamuda JV is in a polar positon to bag the tunnelling works given several factors.
Those include cost advantage from the reuse of tunnel boring machines from MRT1 and 7.5 per cent pricing advantage accorded under the Swiss Challenge, a process in public procurement.
Similarly, analysts from TA Securities Holdings Bhd (TA Research) said the awards for the MRT line 2 underground package and two elevated packages are imminent.
The research house strongly believed the MMC-Gamuda JV would secure the underground package given its familiarity with the ground condition after undertaking the underground works for line 1 and strong execution track record.
Concurring with HLIB Research and TA Research, the research division of Public Investment Bank Bhd (PublicInvest Research) in another report said Mass Rapid Transit Corporation Sdn Bhd (MRT Corp) will unveil the winners for at least three packages for MRT2 soon including underground package.
The research firm observed among the key jobs eyed by Gamuda are the MRT 2 tunnel works worth approximately RM6.5 billion and tendering as sub-contractor for other projects such as the Pan Borneo Highway and Light Rapid Transit Line 3 (LRT3). Meanwhile, the research arm of Maybank Investment Bank Bhd (Maybank IB Research) in another report said said tenders for several civil work packages including the underground tunnelling and elevated viaducts were on-going.
It noted Gamuda is anticipating the major civil job awards for MRT2 will start within one month.
The research firm noted the entire civil works would be awarded over the next 12-15 months. It added the elevated viaducts will comprise 10 packages; four northern packages and six southern packages.
Maybank IB Research observed that similar to MRT 1, the northern packages for MRT2 would be more challenging than the southern packages as the construction will be done in more densely populated areas and requires better traffic management.
Therefore, it believed the northern packages would be awarded first and it was opened to just MRT1 main contractors.
In the meantime, Gamuda which released its second quarter financial year 2016 (2QFY16) financial performance ended January 2016 recently said net profit decreased by 12 per cent year-on-year (y-o-y) to RM160.11 million from RM182.18 million recorded for 2QFY15 ended Jan 2015.
The company added 2QFY16 revenue also declined by 19.3 per cent y-o-y to RM527.43 million from RM653.24 million for 2QFY15.
MMC Corp Bhd-Gamuda joint venture (JV) would secure the underground package given its: i) familiarity with the ground condition after undertaking the underground works for MRT Line 1; ii) strong execution track record with MRT line 1; iii) cost advantage as the tunnel boring machine used in MRT Line 1 could be reused for MRT Line 2; and iv) advantage under the Swiss Challenge tender method, which allows the JV to match or better the best bid submitted by competitors.
The total cost of MRT Line 2 is estimated at between RM28 billion and RM30 billion.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
SifuKing
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Posted by SifuKing > 2016-03-24 00:17 | Report Abuse
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