- The Star reported today that the second and third Klang Valley MRT lines may extend to Putrajaya.

- Quoting MRT Corp’s Chief Executive Officer Datuk Azhar Abdul Hamid, The Star report revealed that the Land Public Transport Commission (SPAD) is in the midst of preparing a working paper on the new lines.

- The details would be presented to the government for approval. A firm decision could be forthcoming by year-end.

- We gather that the working paper would cover both the second as well as third line extension. However, the government would have the final say on whether both lines would be undertaken simultaneously or separately.

- If true, this is positive for Malaysian contractors as an extension of the MRT service area to include Putrajaya would likely translate into more working opportunities.

- During a meeting with Gamuda’s management last month, we understand that MRT 2 or Sg.Buloh-Serdang-Putrajaya (SPP) line may receive federal approval by July 2013.

- This new line is to be developed over two phases. The first phase runs from Sg.BulohSerdang, and Phase 2 - Serdang-Putrajaya.

- By extrapolating the cost structure for the on-going Sg.Buloh-Kajang (SBK) MRT line, we had estimated the SPP line to cost ~RM25bil. Compared to the former, the proposed SSP line is ~5km longer at 56km and has four more stations (35).

- The MMC-Gamuda JV is the Project Delivery Partner (PDP) for the elevated portion and contractor for tunnelling works under the ongoing Sg.Buloh-Kajang (SBK) MRT line.

- For this reason, we rate the MMC-Gamuda JV as a strong bet for future MRT jobs – more so with its ownership of ten tunnel boring machines (TBM) under the SBK line that can be redeployed. The PDP for the SSP line could be announced shortly after its approval.

- We also foresee IJM, WCT and Sunway to have potential roles on the civil portions of future MRT line, with KimLun Corp as strong bet to secure the tunnel lining portion.

- The expanded job flows would also cascade downwards to the suppliers of building materials; namely Ann Joo Resources, Lion Industries and Lafarge.

Source: AmeSecurities