- Gamuda reported on Bursa Malaysia last Friday that  MRT Corp has awarded the underground packageof the Sg.Buloh-Kajang MRT to its JV with MMC Corp. The scope of works includesthe design and construction of tunnels, seven underground stations and otherassociated works. This encompasses a total length of 9.5km that traverses from Semantannorth portal until Maluri south portal. As expected, the contract value is estimated at around RM8.3bil(Gamuda's effective 50% stake: RM4.1bil).

- We estimate that the award of the tunnelling contractforms part of an estimated RM10.5bil worth of contracts ' or 27 out of a totalof 90 work packages ' that have been awarded thus far.  The major jobs that have been awardedincluded two elevated viaduct packages worth RM974mil (v6) and RM764mil (v5)that have been awarded to IJM and Ahmad Zaki Resources Bhd (AZRB),respectively. The segmental box girdle package for certain sections worth aroundRM223mil was won by KimLun Corp.

- More importantly, we expect this latest award to expeditethe award of other remaining packages within the SBK line. To be sure, thetunnelling package was one of three major packages due to be awarded thismonth.  

- From our channel checks, the other two packages areelevated viaduct works that may include v1 (Sg.Buloh-Kota Damansara: Bumicategory) and v4 (Section 16-Semantan portal: open category) with an averagecontract value of between RM500mil and RM1bil. While the package v4 remains anopen affair with the 11 pre-qualified contractors in the fray, we gather thatAhmad Zaki Resources (AZRB) along with Naim Holdings and TRC Synergy could bein the running.

- This could be followed by the dishing out of another twomajor packages next month, which are likely to involve viaduct works again forv2 and v7.

- Similarly, we also expect the award of the tunnel liningsegment to be forthcoming by end-2Q11, for which KimLun could once again emergeas a strong contender along with MTD ACPI and privately-held Hume Industries.

- As for the station works (8 packages), we fancy WCT tolaunch a strong bid for the five packages under the open category whilePintaras Jaya could shape up as a contender for the piling/sub-structure works.

- We also envisage significant gains for the suppliers ofbuilding materials when construction works on the MRT project gather momentum.We expect maiden orders to materialise as early as July 2012 when physicalworks swing into motion. Within this space, we like Ann Joo Resources (steel),Lion Industries (steel) and Lafarge Malayan Cement (cement).

- An additional two MRT lines costing a combined RM30bilwould provide further impetus to the local construction industry, although adecision is unlikely to be forthcoming before the 13^th  General Election.