Construction players likely to gain from 13MP

PETALING JAYA: The local construction sector is poised to benefit from the 13th Malaysia Plan (13MP), supported by higher total development expenditure of RM611bil.

On July 31, Prime Minister Datuk Seri Anwar Ibrahim announced a higher allocation of development expenditure for the construction sector to RM430bil.

“Although only RM430bil will be financed by the government, it is still 8% higher than the RM400bil expenditure allocated to the 12MP,” said Maybank Investment Bank Research (Maybank IB).

On that note, Maybank IB said the higher spending plan could translate into a greater number and value of contracts to be awarded over the next five years.

The research house noted that the previous increase in development spending under the 12MP, which was 54% higher than the 11MP, had already led to a meaningful rise in infrastructure job flows.

“Thus, we believe the 13MP is positive for the Malaysian construction industry,” it stated.

While the Klang Valley Mass Rapid Transit 3 (KVMRT3) was not mentioned in the 13MP, ports appeared as the megaprojects under the new masterplan.

This came as a surprise for Maybank IB, given the optimism surrounding the project just two weeks prior. It is worth noting that KVMRT1 and KVMRT2 yielded large-scale job opportunities valued at RM21bil and RM31bil, respectively.

On a brighter note, capital expenditure for the Carey Island cargo port is estimated at RM28bil until 2060, while the Westports 2 expansion is RM12.6bil over the next 30 years. The Port of Tanjung Pelepas expansion is projected at RM4.9bil.

“We estimate that they could avail a whopping RM45.5bil worth of jobs,” said the research house, adding that potential beneficiaries of the port megaprojects include Muhibbah Engineering (M) Bhd, IJM Corp Bhd and WCT Holdings Bhd.

Other than ports, the 13MP also outlines potential projects involving water, flood mitigation, industrial parks, highways, roads and hospitals. These sectors form part of broader national plans, including the Water Sector Transformation Plan 2040 and the Flood Mitigation Plan.

“In our view, potential beneficiaries which are likely to benefit the most from the aforementioned projects are IJM, Gamuda Bhd and WCT. These three companies have the experience and expertise to construct most of the aforementioned infrastructure assets.

“We also flag Cahya Mata Sarawak Bhd as a prime beneficiary of continued infrastructure investments in Sarawak,” said Maybank IB.