ECRL spillover effects to benefit local contractors

PETALING JAYA: The East Coast Rail Link (ECRL) project is progressing steadily and is poised to generate further opportunities for local contractors, with new tenders and possible extensions in the works, says RHB Research.

Citing the Transport Ministry, the research house said the ECRL project had reached 87% completion as of August.

On the contract awards front, RHB Research said Malaysia Rail Link Sdn Bhd had awarded RM18.6bil worth of contracts as of July 1, surpassing the initial target of RM10.8bil.

Key players include IJM Corp Bhd, Advancecon Holdings Bhd, HSS Engineers Bhd, and Tanco Holdings Bhd.

The research house said the next phase of the project is expected to create fresh opportunities, particularly with the 25km spur line connecting ECRL’s Jalan Kastam station to Port Klang – known as Section D – slated to begin physical works by the end of 2025 with completion targeted by December 2027.

It noted that bids for Section D are said to range between RM600mil and RM900mil.

The research house, citing a local media report, said at least five firms had tendered their bids, including a 49:51 joint venture between WCT Holdings Bhd and MMC Corp Bhd, Dhaya Maju Infrastructure (Asia) Sdn Bhd, DOM Industries (M) Sdn Bhd, and a joint venture between SIPP Rail Sdn Bhd and YTL Construction Sdn Bhd, a unit of YTL Corp Bhd.

ECRL’s total construction cost, last revised in December 2022, stands at RM50.3bil – covering the 665km railway line from Kota Bharu to Port Klang with 20 stations.

The cost also includes the Serendah Bypass, which facilitates cargo movement from the north, as well as rail extensions from Jalan Kastam station to both Westports and Northport terminals.

Under Budget 2026, the government reaffirmed that phase one (Kota Bharu–Gombak) remains on track for completion by the end of 2026.

RHB Research also noted steady progress along the Kuantan–Gombak stretch of the ECRL, noting it “felt upbeat about the progress” following its observations on site.

The research house added that the ECRL could see further upside from a proposed extension to Rantau Panjang, Kelantan, which borders Thailand.

“A catalyst for the ECRL project which could create opportunities for contractors is the proposal to extend the ECRL to Rantau Panjang, Kelantan bordering Thailand, which is still at an initial discussion stage,” it said, adding that the government planned to attract more investments and develop new logistics hubs and industrial parks along the route.

RHB Research said IJM is a “strong contender” for opportunities in the industrial building space, given its track record in constructing warehouses, data centres and semiconductor manufacturing facilities.

Overall, the research house has maintained its “overweight” call on the construction sector, with all 11 stocks under its coverage rated “buy”, naming Gamuda Bhd, Sunway Construction Group Bhd and Binastra Corp Bhd as its top picks.