- The New Straits Times has reported that the project delivery partner (PDP) for the Klang Valley LRT Line 3 (LRT3) could be announced as early as next week.

- NST Prasarana Negara Bhd (SPNB) reported that there were seven shortlisted candidates for the award. They are:- (i) a JV between Gamuda and MMC; (ii) a tie-up between Malaysian Resources Corp (MRCB) and George Kent; (iii) UEM Group; (iv) Naza TTDI and Chian-based CSR Zhuzhou Electric Locomotive Co; (v) Sunway; (vi) a joint-effort between WCT and Alloy MTD Group; and (vii) the UEM Group.

- Earlier press reports had indicated that there were six instead of seven shortlisted candidates.

- To recap, the RM9bil LRT3 project runs from Bandar Utama to Klang. It measures ~36km in length and will have 25 stations, including one that is underground. The route will commence from Bandar Utama, heading towards Tropicana before cutting across HICOMGlenmarie Industrial Park towards Shah Alam via Section 13 near the Shah Alam stadium, University Teknologi Mara in Section 2 and i-City in Section 7.

- From Shah Alam, it will head to Bukit Raja and the Klang KTM Komuter station before moving southbound for Bukit Tinggi and Johan Setia. This new LRT service is expected to be operational by 2020.

- Tender for the LRT3 PDP opened last December, generating interest from 18 companies. The PDP structure for LRT3 would be quite similar to the ongoing Sg. Buloh-Kajang MRT line (MRT 1) by Mass Rapid Transit Corp Sdn Bhd. Under MRT 1, the MMC-Gamuda JV as the PDP will receive a fee of 6% of the total work package under their scope.

- The timeline to award the PDP has been pushed back from July as earlier expected. Nevertheless, the report quoted Prasarana as explaining that the rescheduling was to allow for better preparation of the project.

- Of the lot, the MMC-Gamuda JV has the most extensive portfolio of rail-related projects in Malaysia. It is the PDP for the Klang Valley MRT 1 & 2 lines, as well as the tunnelling contractor for MRT 1. The JV had also teamed up for the Ipoh-Padang Besar Electrified Double Tracking (EDT) project. Overseas, Gamuda was the contractor for the Kaohsiung MRT line in Taiwan.

- We opine that the MRCB-George Kent JV could also emerge as a frontrunner for their combined experience in rail works. MRCB is the developer of the KL Sentral Transport Hub. Its partner, George Kent, won a system works job for the Ampang LRT line extension last July together with Lion Pacific.  

Source: AmeSecurities Research - 4 Sep 2015