KUCHING: The construction period of five years for the possible East Coast Rail Line (ECRL) project has been viewed as a “a tall order” and analysts are also skeptical about its construction commencement early next year.
The research arm of TA Securities Holdings Bhd (TA Securities) opined that the construction period of five years appears to be a tall order as well.
“The construction of the first phase of the project between Klang Valley to Kuantan alone may take about five years to complete,” it added in a note yesterday. “It may require more than a decade to complete the entire 600 kilometre rail line.”
It has been reported that China would provide RM55 billion in soft loans to Malaysia for the construction of the project, and at that amount, it translates into RM92 million per kilometre run.
“This is significantly higher than Ipoh-Padang Besar Northern Double Track at RM38 million per kilometre, Gemas-Johor Bahru Southern Double Track at an estimated cost of RM36 million per kilometre and Seremban-Gemas Double Track at RM36 million per kilometre,” it said.
It added, “The project would be the single largest construction project to be implemented in Malaysia to-date. However, we are reserved that the project could commence early next year as some time is required for finalization of the detailed design, land acquisition and tender exercise.”
Meanwhile, TA Securities noted that based on reports, Malaysia and China would also sign an engineering-and-construction contract on the project, of which, China would carry out the detailed engineering and design for the ECRL, procure all materials and equipment, and deliver the facility to Malaysia.
For the construction contract to be awarded to government-owned China Construction Communications Company (CCCC), there are terms that state it has to work with local partners, it said.
As CCCC would have to partner local contractors in this project, TA Securities believed Gamuda Bhd, IJM Corporations Bhd, WCT Holdings Bhd, Sunway Construction Group Bhd, Gadang Holdings Bhd and Fajarbaru Builder Group Bhd – which have related experience in railway construction and/ or earthwork, as potential beneficiaries of this mammoth project.
Piling contractors such as Econpile Holdings Bhd, Pintaras Jaya Bhd, Ikhmas Jaya Group Bhd could benefit from piling works for viaducts and bridges along the alignment.
It added, the first phase of the 600 kilometre rail line will be from the Klang Valley to Kuantan, second from Kuantan to Kuala Terengganu, and third from Kuala Terengganu to Kota Baru and Tumpat.
“In Budget 2017, it was announced that the project would connect townships such as Port Klang, Integrated Transport Terminal Gombak, Bentong, Mentakab, Kuantan, Kemaman, Kerteh, Kuala Terengganu and Kota Baru before ending in Tumpat,” it said.
Overall, TA Securities maintain its ‘neutral’ stance on the construction sector pending further development on the project.