Highlights

• BN likely to retain control. Political analysts hold a consensus view that the Barisan Nasional (BN) coalition will likely retain control of Sarawak. CM Adenan’s high approval rating (74%), redelineation exercise resulting to more rural constituencies and a fragmented opposition are all factors working in BN’s favour.

• Politics of developmentalism. It has been observed that funding promises, especially for infra increases as election approaches. This is already happening with Budget 2016 spelling many benefits for “Sarawakians”. We expect more positive news flow on project rollouts running up to the polls. 

• What do voters want? A survey by the Merdeka Centre reveals that “j obs creati on” and “improving rural infra” are the 2nd and 3rd most important issues requi ring attention from the State Govt. We believe the State Govt will try and address these matters through (i ) industrialisation of Sarawak’s economy via SCORE and (ii) building the Pan Borneo Highway (PHB) to improve connectivity in the state.

• SCORE for Sarawak. SCORE has amassed RM33bn worth of investments from 2008-2014. Most that have set up within SCORE are energy intensive industries. The key pull factor here is the availability of cheap electricity generated by hydro dams. To further harness this potential, Sarawak Energy has planned to build 12 hydro dams from 2008-2020, increasing the state’s generation capacity by 7000MW. This would spur other infra requirements such as transmission lines and access roads.

• Pan Borneo takes off. We reckon that the 1,089km PBH (RM16bn) will be the most anticipated mega project to kick start running up to the polls. 17 consortiums are said to have  been prequalifi ed for 10 packages invol ving the highway’s main stretch. Initial awards are expected as soon as March. 

• SCable - Beneficiary of ramp up in Sarawak’s generation capacity via transmission line contracts. Also looking to supply guardrails and lamp poles for the PBH.

• HSL - Marine engineering expertise provides an edge to bid for PBH given Sarawak’s swampy terrain.

• CMS - Beneficiary of PBH via construction and supply of aggregates. Also a cement monopoly in Sarawak.

• Naim - Said to be top contender (JV with Gamuda) for one of the earlier PBH packages.

• TRC - Only Peninsular cont ractor that can bid for state funded jobs. Has competed RM1bn jobs in Sarawak.

• Harbour – To benefit from Sarawak’s overall devel opment via increase in demand for project cargo.