KUCHING: Given the green light for several construction projects to commence under Budget 2011, construction player TRC Synergy Bhd (TRC Synergy) was slated to clinch the role of main contractor for the 9.2 kilometre (km) Kelana Jaya line on the back of benefitting from various jobs in Sarawak’s construction market.
Analysts at HwangDBS Vickers Research Sdn Bhd (HwangDBS Research) understood that the group was the frontrunner to be the main contractor for
the Kelana Jaya line in the Klang Valley, part of the 17.7km stretch which closed for tender in late August
and was awaiting award.
The research house estimated total contract value to be worth at least RM1 to RM1.5 billion, half of the RM2.5 to RM3 billion for Package A that included 7.2km of Ampang line.
The procurement of this project, said the research firm, would see TRC Synergy’s order book ballooning four-fold to RM1.9 billion from a current RM0.4 billion which implied a four or five years earnings visibility.
This was on the back of TRC Synergy hoping to see substantial order book replenishment over the next three to six months after a period of muted contract wins.
Its total tender book which amounted to RM3.3 billion included the light railway transit (LRT) extensions and infrastructure works worth approximately RM1 billion in the Sarawak Corridor of Renewable Energy (SCORE) project amidst a RM200 million job for the East Coast Economic Region (ECER).
It noted that TRC Synergy’s UPK licence would allow the group to compete in the closed Sarawak construction market which is currently dominated by a handful of players.
The research house understood that there were 15 packages in SCORE that was opened to UPK licence holders.
HwangDBS Research sustained its belief that contract flows in the state would be strong, given the anticipated rollout of more projects in SCORE and the upcoming state elections.