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MRT Open Day Highlights
• We attended the MRT open day which was held in Mid Valley Convention Centre by Suruhanjaya Pengangkutan Awam Darat (SPAD). The open day was held to disseminate
more information on the MRT project and also to gather the public’s feedback on it.
• After various proposals, the Government has more or less finalised the MRT route. Figure #1 shows the MRT route which spans from Sungai Buloh to Kajang with 35 stops. The
length of the line is 51km with 9.5km of it being underground. The underground portion will begin after the Semantan stop and ending after the Maluri stop. A more detailed layout on the MRT route can be seen at the following weblink,
http://kvmrt.com.my/w/wpcontent/uploads/MapKVMRTB_opt.jpg.
• The MRT route from Sungai Buloh to Kajang is similar to Prasarana’s proposal back in 2006 and it is also a mixture of Gamuda-MMC’s proposal (refer Figure #2). This route was
chosen first as these areas are not adequately served by railbased public transport.
• Construction work is expected to begin in July 2011 and should be completed by 2016.
• The Sungai Buloh-Kajang line is just the first phase of the MRT project. Going forward, the MRT network will be expanded and proposals are still being studied.
• As seen in Figure #2, Gamuda-MMC’s (Not Rate) MRT proposal consists of 3 lines (red, green and black) with a total length of 140-150km involving approximately 50km of tunnelling works. Their proposal costs around RM36.6bn of which RM12-14bn is allocated for the tunnelling portion.
• Hence, the construction cost for the Sungai Buloh-Kajang line is expected to cost around RM14-15bn. Our estimates are based on RM200m/km (LRT Extension Project estimates) for rail works andRM280m/km for tunnelling works.
• The finalised Sungai Buloh-Kajang line would be slightly negative for Gamuda-MMC JV (Not Rated) as their proposal for Phase 1 of the MRT project is being reduced, resulting in smaller than expected construction orders for the JV (refer Figure #3). However, subsequent phases of the MRT project may fetch higher value and may benefit the JV in the future. Partner and construction cost are still being discussed.
• We believe that the layout for Phase 1 of the MRT project is more or less finalised, albeit some minor modifications arising from public feedback.
We view the Government’s initiative in engaging the public’s feedback as positive as it will draw public scrutiny, resulting in more transparency and ultimately leading to a more effective execution of the MRT project.
• We expect more positive newsflow from the Economic Transformation Plan; hence we remain our OVERWEIGHT stance on the sector.
Top Picks Top picks in order of preference:
• Mudajaya Group (BUY, TP: RM6.54)
• Hock Seng Lee (BUY, TP: RM2.46)
• WCT (BUY, TP: RM3.95)
• TRC Synergy (BUY, TP: RM2.15)
