KUALA LUMPUR: AmResearch maintains its conviction that Gamuda would be biggest winner arising from the Klang Valley Mass Rapid Transit (MRT) worth RM36 billion.

The research house said on Friday, July 23 that its ground checks indicate that the project could receive Federal-endorsement by 4Q10 following completion of feasibility studies.

?Based on a 50% share of the tunnelling works and net margin of 10% - this contract could potentially lift Gamuda?s fair value by 67 sen a share (or 18%) to RM4.50/share and double its outstanding order book to RM13 billion,? it said.

AmResearch also reckons that the Scomi group should be among the leading contender for sub-contracting works for the MRT project.

The Scomi Group is currently partnering India?s Larson & Toubro as main contractors for the prestigious RM1.8bil Mumbai Monorail project.

On Thursday, the UEM group has indicated that they are prepared to bid for the MRT if the jobs were to be tendered out on an open tender basis.

The MRT project forms part of the Federal Government?s overall plan to upgrade Klang Valley public transportation system worth a whooping RM50bil. UEM was among the main contractors for the original Kelana Jaya Light Rail Transit (LRT) line.

AmResearch said so far, the Gamuda-MMC JV has submitted an unsolicited proposal for this massive project. The JV had indicated its interest secure the tunnelling portion of the project worth an estimated RM13bil or 30% of overall project value ? in addition to being the overall project manager.

Last month, press reports indicated that the Federal Government had appointed two independent consultants - Minconsult Sdn Bhd and Andercon Technologies Ltd ? to carry out the study. The study is to be completed and presented to the Federal Government in three months? time.
?At this juncture, the Federal Government has yet to make a formal decision on this project that would include the tender procurement process. Our channel checks indicate that one such option would be to have the project being tendered out under a ?Swiss Challenge? approach. In other words, other parties are allowed to come out with competing bids although the Gamuda-MMC JV is likely to have the first right or refusal for the job,? it said. AmResearch thinks the Gamuda-MMC JV would still hold a competitive advantage on two counts. First, the JV has a head start as it is the first party to come up with a comprehensive plan to integrate all the rail links within the Klang Valley.

Secondly, it believes the Gamuda-MMC JV is a strong contender for the tunnelling works package worth RM13 billion ? given its prior track record in undertaking the STORM. Gamuda is also the sole Malaysian contractor to-date to have delivered an MRT system (in Kaohsiung, Taiwan).

Thirdly, part of the Gamuda-MMC JV?s proposal is to the Federal Government is to have the first right of refusal for the project