- According to various news reports, two of China’s top railway companies are keen to bid for the KL-Singapore High Speed Rail (HSR).

- According to a report from China-based website China.org.cn, China Railway Construction Corp (CRCC) and China Southern Railway are among the names that have surfaced.

- Other bidders are believed to be East Japan Railway Company (JR East), French-firm Alstom and Siemens AG of Germany.

- According to a report by another online portal, CRCC had reportedly offered the lowest bid and the shortest construction timeline in its bid to secure the massive project.

- The report also added that CRCC’s quotes are only about half of the estimated cost of the Japanese bid.

- We, however, expect some of the bids/contracts to eventually filter down to some of the Malaysian-based contractors – particularly for the civil-engineering portion. Given its balance sheet strength and experience in undertaking high-profile railway engineering jobs, we believe Gamuda could be a candidate.

- The opening bids for the KL-Singapore HSR are supposed to come up by June this year. The entire HSR project is supposed to be completed by 2020.

- Earlier, seven stations on the Malaysian end have been identified. KL, Putrajaya, Seremban (Negeri Sembilan), Ayer Keroh (Malacca), Muar, Batu Pahat and Nusajaya (Johor). The main terminal will be located in Bandar Malaysia.

- All said, we believe it is a tad premature to pre-empt any orderbook prospects from the HSR at this juncture.

- We nevertheless believe news flow momentum on the other big-ticket rail jobs – i.e. Klang Valley MRT 2 and LRT3 – are firmly on track.

- Tenders for MRT2 should commence by 4Q15 ahead of the awards of major packages from mid-2016 onwards. Similarly, we understand that several parties have been shortlisted for the Project Delivery Partner (PDP) role for the LRT3 job, where some concrete developments should surface by 2H this year.

Source: AmeSecurities