This article first appeared in The Edge Malaysia Weekly, on September 28 - October 4, 2015.

After several years of deadlock over the construction of the Damansara-Shah Alam Elevated Expressway (DASH) and Sungai Besi-Ulu Kelang Elevated Expressway (SUKE), project owner Projek Lintasan Kota Holdings Sdn Bhd (Prolintas) has indicated that it will give priority to several companies with relevant experience to undertake the job.

According to the pre-qualifying tender documents sighted by The Edge, the concessionaire is in favour of companies that are not only financially strong but also have experience in building elevated highways.

“This means that there are only a handful of players capable of handling projects of this scale,” says an industry source.

He points out that companies that have a good chance of securing the multibillion-ringgit projects include IJM Corp Bhd, Sunway Bhd, Malaysian Resources Corp Bhd (MRCB), Mudajaya Group Bhd and UEM Group Bhd.

According to the pre-qualification documents for both projects, among Prolintas’ mandatory requirements is that applicants must have a minimum of five years’ experience and establishment. They must also have a valid Grade G7 licence specialising in CE01 and CE02 — road and pavement construction and bridge construction respectively — from the Construction Industry Development Board.

In addition, they need to have experience in the construction of elevated roads and bridges, and a strong financial background and capacity to undertake the project. Applicants are also required to state their technical capacity, including equipment and personnel.

“An applicant’s financial capacity will be judged on the basis of its net worth, working capital, value of the unfinished portion of its current contracts and current credit resources,” the documents state.

The pre-qualification submission closed on Sept 17.

The five companies are no strangers to construction of roads and bridges locally and abroad.

For instance, UEM Group has had a long history in roadworks. It constructed the 846km North-South Expressway and the 44km Malaysia-Singapore Second Link, among others.

IJM (fundamental: 1.30; valuation: 0.80), which is sitting on cash and cash equivalents of RM1.98 billion, built the Bangsar linkages in Kuala Lumpur and the Butterworth Outer Ring Road in Penang. It had non-current assets of RM8.72 billion and current assets of RM11.36 billion as at June 30.

Mudajaya (fundamental: 0.35; valuation: 0.90), which had cash and cash equivalents of RM120.69 million and total assets of RM2.09 billion as at June 30, 2015, built the Pusa Sessang Coastal Road in Sarawak and the entrance and exit road for the Lebuhraya Utama Selatan to Gombak, Selangor. It also built two four-lane highways in India.

MRCB (fundamental: 1.30; valuation: 2) built the 8.1km Eastern Dispersal Link Expressway in Johor and the 18km Duta-Ulu Kelang Expressway. It had cash of RM321.14 million and total assets of RM6.87 billion as at June 30, 2015.

Sunway (fundamental: 1.50; valuation: 1.80) built the RM1.04 billion Kajang Traffic Dispersal Ring Road, the Kajang-SILK Highway and the country’s first elevated Bus Rapid Transit line. It is sitting on a cash pile of RM1.6 billion and has total assets worth RM13.78 billion.

In comparison, Prolintas registered a net loss of RM48 million on the back of RM152.3 million in revenue for its financial year ended December 2013. It had non-current assets of more than RM2 billion and current assets of RM266.8 million. It also had long-term debt commitments of just over RM2 billion and short-term borrowings of RM140.8 million. It is noteworthy that Prolintas had negative reserves of RM247.3 million as at end-December 2013.

DASH, estimated to cost RM4.2 billion, will see a 20.1km three-lane dual carriageway traversing from Puncak Perdana near Universiti Teknologi Mara to Damansara Perdana. It will have 13 interchanges and three toll plazas, and 85% of the main alignment will be elevated.

The RM5.3 billion SUKE stretches 31.8km, from the Shah Alam Expressway in Bukit Jalil to the Middle Ring Road 2 in Ulu Kelang. The three-lane dual carriageway will have three toll plazas, and 90% of its length will be elevated.

Prolintas is currently operating three highways — the Ampang-Kuala Lumpur Elevated Highway, Guthrie Corridor Expressway and Lebuhraya Kemuning-Shah Alam.

The pre-qualifying documents were issued just after the Selangor government agreed to include DASH’s alignment into the Petaling Jaya City Plan 2 in June following three years of objection by people living near the proposed expressway.

SUKE also has had its fair share of objection by residents in the Klang Valley, but thus far it is not certain if it is included in the city plan. Both expressways, which were mooted by the federal government in 2011, are expected to commence construction in the first quarter of next year.

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