Gamuda to start benefitting from mega project

PETALING JAYA: Gamuda Bhd, whose 60% – owned subsidiary SRS Consortium Sdn Bhd is the project delivery partner (PDP) for the Penang transport master plan (PTMP), will begin the first reclamation works for the Penang South Island (PSI) project in the first quarter of this year.

A spokesperson for the construction and property development group told StarBiz that SRS is proceeding with the project as planned, with reclamation works to start with the 2,300-acre Island A.

“The PSI project is envisaged to raise the game for Penang as an investment destination for global corporations, combining advanced technologies that cater for future generation industries, with the master plan and design concepts embracing the key ESG or environmental, social and corporate governance principles,” the spokesperson said.

This progress followed confirmation by Penang Chief Minister Chow Kon Yeow earlier this month that the first project under PTMP would commence on Feb 1. This involved the construction work of the six-kilometre bypass connecting Tun Dr Lim Chong Eu Expressway to Ayer Itam by Consortium Zenith Construction Sdn Bhd, Chow said in a statement dated Jan 15.

Gamuda said the PSI has allocated 700 acres of Green Tech Park, targetted at high-value E&E players, on Island A. It would complement the mature industrial eco-system of Bayan Lepas.

It was earlier stated that the plan was to complete the reclamation of the industrial park and sell it. The group would then use the cash flow and profit to finance further reclamation works under the PSI component of the PTMP, involving islands A, B and C with a total area of 4,200 acres at the southern tip of Penang Island, as well as the construction of the light rail transit and Pan Island link highway under the PTMP project.

SRS signed the agreement to be the PDP to manage and deliver the PTMP in July last year.

Under the agreement, SRS would deliver different public transport components, including highways.

In addition, it would provide new reclamation sites comprising Islands A, B and C.

Gamuda would provide a funding plan that would include a RM1.3bil bridging loan to the Penang government over the reclamation of Island A.

Gamuda’s partner in SRS are Loh Phoy Yen Holdings Sdn Bhd and Ideal Property Development Sdn Bhd, with each holding 20% in the PDP.

The progress of the PTMP is a positive development for Gamuda, which is also seen as a strong beneficiary of the revival of mega infrastructure projects in Malaysia, such as the mass rapid transit 3 (MRT3) project in the Klang Valley.

Analysts in general are optimistic about the prospects of Gamuda. MIDF Research, for one, noted potentially fast-tracked mega public infra projects in Malaysia could drive order book replenishment prospects for the company.

“We believe the approval and impending rollout of mega public infra projects, including MRT3, as announced in Budget 2021 to pump prime the economy to benefit the group,” the brokerage said in its recent report.

“With the expected completion of MRT2 by end-2022, we foresee that the MRT3 to be a low-hanging fruit project to be rolled out earliest in the second half of 2021,” it added.