KUALA LUMPUR (March 21): Construction works for Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya Line (MRT2) are set to gain stronger momentum this year as all major civil work packages have been awarded, said CIMB Research.

“Ten major civil works packages have been awarded, including stations and 1 single largescale tunneling package. Individually, the elevated section is 20.3% completed, underground section 26%, and systems works 12%,” CIMB Research said in a note yesterday after meeting with MRT Corp's management on Friday (March 16).

Meanwhile, progress of MRT 3 will be accelerated in 2018, the research house said. 

“MRT Corp expects the decision on the turnkey contract award within the next few weeks. We believe there is still a possibility that more than one joint venture will secure the contract, due to the technical expertise and financing required,” CIMB Research said.

By November, MRT Corp targets to finalise all required approvals before transferring project works to the turnkey contractor, with construction expected to start in 3Q2019, the note added.

As for MRT SBK Line (MRT 1), MRT Corp said the current daily ridership stands at 130,000 to 150,000, which is still short of the targeted 400,000 daily ridership.

It said the target should be achievable over time, as the rail system matures and public transport modal share rises for major catchment areas. “There were, however, no details on the targeted break-even ridership threshold,” CIMB Research said.

The research house maintains Overweight on the construction sector, with Gamuda Bhd as its top pick for rail contracts.

“At later stages, we believe IJM Corp Bhd and Muhibbah Engineering (M) Bhd could secure MRT 3 packages as well. Key sector risk is rising competition from foreign contractors,” the note added.