KUALA LUMPUR: A consortium led by George Kent (Malaysia) Bhd has emerged the front runner for a RM1 billion deal to build new tracks for the mass rapid transit (MRT) Line 2, known as the Sungai Buloh-Serdang-Putrajaya (SSP) Line.

According to sources familiar with the matter, the work package is expected to be awarded by Mass Rapid Transit Corp Sdn Bhd (MRT Corp) by next month.

George Kent, which is 42.21% controlled by Tan Sri Tan Kay Hock, has teamed up with Chinese partner China Communications Construction Co Ltd (CCCC) to bid for the work package. The equity structure of the consortium is not known.

The consortium is said to have submitted the most competitive bid in terms of pricing, putting it in the lead for the engineering, procurement, construction and commissioning of the MRT tracks for the 52.2km-long SSP Line.

If the two companies were to succeed in clinching the deal, it would be the third rail infrastructure project for George Kent in five years.

The company’s primary business used to be in water meters, but made its big break into rail-related engineering projects when it won the RM1.1 billion signalling system package for the light rail transit’s (LRT) Ampang extension line. Since then, George Kent has also teamed up with Malaysia Resources Corp Bhd to win the project delivery partner role for the third LRT line that will cost an estimated RM9 billion.

The company’s net profit has risen dramatically as well. For the trailing 12-month ended April 1, George Kent posted a net profit of RM55.43 million. This was a 117% increase from the RM25.56 million net profit posted in the financial year ended Jan 31, 2013.

Already, George Kent’s share price has begun to move, gaining over 30% since the beginning of the month to close at RM2.61 yesterday. Shares in George Kent have jumped 119% over the past year.

As of yesterday’s close of RM2.61, the company is valued at RM784.07 million or 14.08 times earnings. The company also has a dividend yield of 2.7%.

However, it is important to note that the track work package, like all of the MRT works, are awarded on a competitive tender basis. Additionally, international bidders are required to have a local partner to bid for the SSP line.

Recall that the track works for the first MRT line was awarded to Mitsubishi Heavy Industries Ltd. But winning work in the first MRT line (Sungai Buloh-Kajang [SBK] Line) does not necessarily make a company a shoo-in for the SSP Line.

For example, while Germany’s Siemens won the rolling stock package for the MRT Line 1, it was South Korea’s Hyundai-Rotem that won the package for Line 2.

Meanwhile, Hong Kong-listed CCCC has a market capitalisation of HK$205.47 billion (RM106.14 billion), and has been actively seeking construction projects in Malaysia. It is understood that CCCC is also bidding for works in the Sungai Besi-Ulu Kelang Elevated Expressway, as well as the Damansara-Shah Alam Elevated Expressway.

CCCC was also linked to the 600km East Coast Rail Line project that would cost almost RM60 billion, an allegation that the company has since denied.