The government has appointed two independent engineering firms to carry out a feasibility study on the proposed RM36 billion mass rapid transit (MRT) project jointly proposed by Gamuda Bhd and MMC Corp Bhd.
The Edge Financial Daily learned that the government has appointed Minconsult Sdn Bhd and Canadian-based Andercon Technologies Ltd to conduct the study.
The appointment of independent consultants to undertake the feasibility study has raised expectations that the government will likely accept the Gamuda-MMC proposal.
The appointment of the independent consultants was also an endorsement of the fact that the government was looking to expedite the project, a source said. Previous reports said the MRT project was expected to kick off next year.
Based on the proposal, the JV will only undertake to bid on 30% of the project, which is worth RM12 billion to RM13 billion. The remaining 70% will be open for tender.
Minconsult is a Selangor-based firm which specialises in a number of engineering fields, including town and transportation planning. It has worked on several projects including the first phase of the STAR LRT system in Kuala Lumpur as well as various parts of the northern electrified double-track project.
Meanwhile, Andercon is an IT support consultant. According to its website, the company configures and manages database infrastructure within operational settings.
Minconsult could not be reached for comment at press time.
To recap, the Gamuda-MMC JV had proposed the development of an MRT system to the government to provide greater rail interconnection within the city centre. The MRT system was subsequently announced by Prime Minister Datuk Seri Najib Razak as part of the 10th Malaysia Plan (10MP) on June 10.
The Gamuda-MMC proposal would entail the laying of between 180km and 200km of rail, which comprises three new lines in addition to the existing LRT system. One of the new lines proposed is a circle line, which would integrate both existing and new rail system.
The research community was generally positive on the project, although questions remain about its execution. Gamuda, in particular, has seen the project’s impact on its share price. Since news of the project leaked out on June 7, Gamuda has risen from RM2.96 to RM3.16 as at yesterday’s close.
Analysts’ consensus target price for Gamuda has been raised from around RM3.30 to RM3.56, according to Bloomberg data.
The impact on MMC’s share price has been more muted. The counter is more thinly traded, as the majority of the shares are held by its majority shareholder Tan Sri Syed Mokhtar Al Bukhary.
This article appeared in The Edge Financial Daily, July 7, 2010.
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