Pan Borneo Highway job awards out soon

This article first appeared in The Edge Financial Daily, on April 2, 2018.
Pan Borneo Highway job awards out soon
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KUALA LUMPUR: Twelve work packages for the Sabah portion of the Pan Borneo Highway are expected to be awarded over the next two weeks, according to industry sources.

The packages are said to be worth some RM500 million each and some contractors are expected to be awarded more than one package.

“From what I understand, the tender board has already approved [the awards of the contracts]. Now the companies are just waiting for the letters of award,” shared an industry executive who declined to be named.

The companies touted as being most likely to have secured packages, include Gamuda Bhd, Econpile Holdings Bhd, Gabungan AQRS Bhd and TRC Synergy Bhd, among others.

There are a total of 35 work packages for the 706km-long highway portion, seven of which are under construction and 10 having received approval from the finance ministry as at end-2017.

The first seven packages involve a total cost of RM3.2 billion out of a total RM12.86 billion for all the packages, Borneo Highway PDP (BHP) Sdn Bhd managing director Shahelmey Yahya was quoted by the media saying in December last year.

The second ten packages were worth RM4.2 billion. The project, which stretches from Sinduman to Kudat on the west coast and Ranau to Sandakan, Lahad Datu and Tawau on the East Coast, is fully financed by the Federal government, according to Works Minister Datuk Seri Fadillah Yusof.

Share prices of Econpile, Gabungan and TRC Synergy last Friday reversed their downtrend that started about a month ago. Meanwhile, Gamuda’s share price has been on steady climb since mid-February amid expectation of continued flow of public infrastructure building jobs.

Gabungan AQRS rose the most at 5.26% or eight sen to RM1.60, giving the group a market capitalisation of RM745.81 million. Its group chief executive officer Datuk Azizan Jaafar, who is also the largest shareholder via his interest in Ganjaran Gembira Sdn Bhd, recently upped his direct stake in the company with an acquisition of 150,000 shares on March 26.

Meanwhile TRC Synergy and Econpile were both up 0.5 sen, representing a 0.81% increase to 62 sen for the former and giving it a market value of RM297.91 million. Econpile recorded a 0.51% gain to 98.5 sen and a market capitalisation of RM1.32 billion.

Conversely, the Bursa Malaysia Construction Index declined 0.26% to 284.19 points last Friday. The index, which tracks some 48 counters including all the above mentioned stocks, has fared poorly over the past couple of months, declining to a one-year low of 253.58 points last Wednesday and having fallen 9.03% year-to-date.

Other companies that have expressed interest in the Sabah work packages include KKB Engineering Bhd, which is involved in supplying steel-related products for the Sarawak portion of the highway.

The company told the media last November that it is interested in bidding for a similar role in the Sabah portion as well.

KKB is currently implementing a RM1.29 billion work package with joint venture partner WCT Holdings Bhd.

Other listed companies involved in the Sarawak stretch of the highway are Kimlun Corp Bhd and Zecon Bhd via a joint venture, and a partnership between Cahya Mata Sarawak Bhd and Bina Puri Holdings Bhd.

In December last year, it was reported by local media that the 18 remaining packages for the Sabah section of the highway would be offered for tender in stages within the first quarter of 2018.