With civil works usually accounting for 50 percent to 60 percent of total project costs, local contractors could clinch between RM8.8 billion and RM11 billion in civil work contracts from the East Coast Rail Link (ECRL) project.
Civil works refers to the jobs that exclude land acquisition, rolling stock, system works and signalling or electrification, among others.
CGS-CIMB Research estimates that the total value of civil works for the RM44 billion stands at between RM22 billion and RM26 billion, reported The Star.
Using this value to estimate the 40 percent portion reserved for local contractors, the total addressable tender value arrived at was RM8.8 billion and RM11 billion.
The remaining RM13 billion to RM16 billion in civil works would be undertaken directly by China Communications Construction Co Ltd (CCCC) – the project’s turnkey contractor.
The job scope of CCCC would mostly include tunnelling works, such as the 7km hill tunnel near Jelebu that replaces the originally planned 18km-long Genting tunnel.
“We understand that the overall civil works is divided into three revised sections, two of which require realignment and approvals for the new railway scheme by the first quarter of 2020, while one section can begin implementation immediately in the second half of 2019,” said the research house.
Local contractors are expected to focus on the tenders for the project’s section B, worth around RM3 billion to RM4 billion based on the 40 percent share of civil works available for tender by unlisted and listed local contractors.
“While the tender rounds are likely to be fairly competitive, we believe selected rail players with track records will emerge as potential contenders,” it said.
Previously scrapped by the Pakatan Harapan government, the ECRL is set for relaunch on 25 July following the signing of supplementary agreement between CCCC and Malaysia Rail Link (MRL) in April.
Image source from NST