- Bintulu Port Holdings (BPort) announced on Bursa Malaysia that it has awarded a contract for the construction of the proposed Samalaju Port to a consortium comprising Pekerjaan Piasau Konkerit Sdn Bhd and China Harbour Engineering Co Ltd (CHEC).

- The contract amounts to RM306mil, and is to be completed in 30 months. The scope of works is for Phase 1 of the breakwater and associated works at this new port.The notice to commence work will be issued separately.

- BPort had on Tuesday, issued a letter of acceptance for the project to the consortium. We gather that there were five bidders for this package. The five are:-

    - TRC Sdn Bhd

    - Inai Kiara Sdn Bhd

    - See Yong & Sons Sdn Bhd

    - Piasau Concrete Sdn Bhd; and

    - MMC Engineering Bhd

- This latest contract brings the total value of jobs awarded at the Samalaju Port at closer to RM940mil, in our estimates.

- TRC had last June, bagged the RM197mil interim port facilities. Earlier in February 2012, Bintulu Port awarded the contract for capital dredging and reclamation works (Phase 1) to Integrated Marine Works Sdn Bhd for a contract sum of RM437mil.

- We expect a step-up in contract momentum for the remaining packages of this project. This would include:- (i) additional phases of the breakwater package; (ii) construction of four new wharves measuring 250m each and (iii) port administrative & operation buildings, port equipment, a conveyor belt, access roads and other facilities.

- With the total capex for the Samalaju Port estimated at ~RM1.8bil, we estimate the balance of works to be around RM800mil.

- The developments at Samalaju Port could be a precursor to a re-acceleration of long-overdue infrastructure works over in Sarawak – and in particular, SCORE.

- The next significant contract that is long overdue is the 500kV transmission line system in Sarawak, where the transmission package is worth ~RM1bil. We expect Sarawak Cable to be ahead of the pack for this job.

- Our other preferred picks for leverage to score include KKB Engineering, Hock Seng Lee, Naim Holdings, BPort and Press Metal

Source: AmeSecurities