Construction sector (AmResearch), overweight

Bina Puri expects award of LCCT building works

* Bina Puri Holdings Bhd (Bina Puri) said that it hopes to receive a letter of award for the new Low Cost Carrier Terminal (LCCT) main terminal and satellite-building works soon, said Business Times in a report on May 6, 2010.

* Bina Puri had jointly put in a bid together with UEM Group on a 40:60 basis. The Bina-Puri-UEM JV was among five companies shortlisted for the main terminal and satellite-building package of the LCCT.

* Other parties that had been shortlisted would have included the Sunway Construction-AHT Norlan Carriage JV, IJM Corp Bhd and Gadang-PPC JV. Bina Puri revealed that it hopes to secure the letter of award by the end of this month.

* In addition to the main terminal and satellite building works, we understand that BIna Puri has also submitted a bid to build an RM150 milllion hotel on a 2.4 hectare piece of land situated next to the new LCCT. We gather that Bina Puri would be partnering Brem Holdings Bhd and Crystal Crown Hotels & Resort in the bid.

* To date, Malaysia Airport Holdings Bhd (MAHB) – which would own and operate the new LCCT in Sepang – has awarded two contracts for the airport.

* First contract worth RM362 million was awarded to WCT Bhd (WCT) last December. Scope of works includes site preparation, earthworks and main drainage. Second contract was awarded in January this year to a Gadang-PPC JV. Total value of works was RM291 million – and includes earthworks for runways and taxiways.

* Latest development validates our view that progress on the new LCCT project is gathering momentum. Earlier this week, MAHB had said the airport would be ready by March 2012, although seven months later than originally scheduled. The airport operator has also agreed to upgrade several facilities at the current LCCT in addition to inclusion of 76 new aircraft parking bays for the new LCCT.

* More importantly, this should trigger roll out of remaining packages under this massive project. This includes parking apron and runway works – where tenders have yet to be called. Both contracts are estimated to cost between RM500 million to RM700 million.