Rail Developments to Boost Malaysia's Construction Sector

Mangalesri Chandrasekaran29 Aug 2016


Spending over RM30 billion on rail infrastructure development in the last four to five years, Malaysia is expected to spend another RM40 billion in the rail sector in the foreseeable future.

Most construction companies have taken a share of the pie throughout the rail infrastructure development period. In fact, large companies like Gamuda Bhd, MMC Corp Bhd, Malaysian Resources Corp Bhd (MRCB), IJM Corp and Sunway Construction have significantly boosted their order books due to contracts clinched from rail infrastructure jobs.

Other key winners are Mudajaya Corp Bhd, Gadang Holdings Bhd, Ahmad Zaki Resources Bhd, IJM Corp Bhd, UEM Construction Sdn Bhd, Apex Communication Sdn Bhd and Naim Engineering Sdn Bhd.

AmResearch expects the awards for the RM9 billion LRT 3 project to start in 2H 2016. To date, 96 companies were shortlisted and pre-qualified to bid.

Companies qualified for LRT infrastructure job’s open category include IJM, Gamuda, WCT, Kimlun, Ikhmas Jaya, Bina Puri, Mudajaya, Sunway Construction, TSR Capital, MTD Grop, Zecon and Naim.

“Meanwhile, familiar names eyeing tunnelling works include Gamuda, IJM, Sunway Construction, WCT and Muhibbah Engineering,” said AmResearch.

Prasarana revealed that the first set of awards comprised advance works, staff quarters and the Johan Setia depot.

The tender process will end with the award of the last scheduled tender by end of this year. Notably, Prasarana has confirmed the alignment as well as location of the 26 stations. It also revealed that it has started land acquisitions.

AmResearch noted that the MRT Line 2 tenders and awards are expected in 2H 2016, with upcoming tenders to include the four elevated station packages and the remaining six viaduct packages.

“Based on an average price of RM320 million per km, the viaduct packages could be worth RM1.2 billion to RM1.4 billion.”

Aside from the big boys, other companies expected to benefit from MRT line jobs include Econpile, Ikhmas Jaya and Kimlun for piling works.

Of the RM32 billion total value, MRT Corp is estimated to have awarded about RM22 billion worth of MRT line 2 packages in the first half of the year alone.

Among the major packages awarded are the RM15 billion underground works to MMC-Gamuda joint venture, three system packages and four viaduct packages.

Looking back, the extension of the light rail transit (LRT) of Ampang and Kelana Jaya lines has dished out some RM7 billion worth of contracts, while the mass rapid transit line 1 of the Sungai Buloh-Kajang line dished out around RM23 billion contracts.

Meanwhile, the high speed rail (HSR) plan between Kuala Lumpur and Singapore has recently been formalised with the two countries signing a bilateral agreement.

While there is no official figure on the cost of the HSR, industry experts expect it to hover between RM40 billion and RM45 billion.

All these rail developments are a boon to Malaysia’s construction sector, which is hungry to boost its order book as the property sectors’ prospect start to dim due to weak consumer sentiment and slowing economy.


Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my


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