We came away from a 2-day working visit to Sydney last week organised by GAMUDA feeling upbeat on its potential in Australia. From site visits, we could glean that its projects in Sydney are in good hands. According to the Australian Trade and Investment Commission (Austrade) and other experts, the prospects of the infrastructure construction market there is bright. We maintain our forecasts, TP of RM5.45 and OUTPERFORM call.

Day 1: Parramatta metro station site, Rosehill Services Facility, and Eastern Creek Precast Facility.

The key observations from the site visits are as follows:

• Sydney Metro West (SMW) is part of Australia’s biggest publictransport project – Sydney Metro, which builds on a vision of threecities (i.e., Eastern Harbour City, River City and Western ParklandCity within the Greater Sydney by 2056) where people live 30minutes from jobs, education, services and great places. (refer toPage 2)

• By 2030, Sydney Metro will have a network of four metro lines, 46stations and 113km of new metro rail. It consists of the operationalMetro North-West Line and three projects under construction, suchas City & Southwest, SMW, and Western Sydney Airport. SMWwhich construction started in 2020, and will connect Parramatta(Central River City) and the Sydney CBD (Eastern Harbour City).

• The new underground 24km railway SMW consists of threetunnelling packages, i.e. (i) Western Tunnelling Package (WTP)which was awarded to Gamuda Australia (GA) - Laing O’RourkeConsortium in March 2022, (ii) Central Tunnelling Package whichwas awarded to Acciona Ferrovial JV in June 2021, and (iii)Eastern Tunnelling Package which was awarded to John Holland,CPB Contractor and Ghella JV in November 2022. (refer to Page2)

• To refresh, the WTP contract was awarded to the GA-ledconsortium for AUD2.16b on 1 March 2022 with GA as the headcontractor while Laing O’Rourke as the delivery partner providingproject management services for an agreed fee. This is atunnelling and civil works package that consists of a 9kmtunnelling between Westmead and Sydney Olympic Park, two newmetro stations, stabling and maintenance facility and a precastfacility.

• As of end-July, the project was 40% complete. Both two tunnelboring machines (TBM) have already been deployed with thespeed of excavation of up to 300m per week. However, the bestdrill speed is averaging 180m-190m per week currently which ismuch better than GAMUDA’s experiences in MRT1 and MRT 2 of70m-105m per week previously given the better soil condition inSydney. It is on track to complete the project by 2026.

• Concern of potential cancellation of the SMW project is cleared aslast Thursday (16 November 2023) the Australian InfrastructureMinister has released a list of 50 infrastructure projects to losefederal funding which none of Sydney Metro projects wereaffected.

• Meanwhile, there are four more additional lines are in the works to be expanded from current lines. These lines include: (i)Liverpool to Bankstown, (ii) Western Sydney International to Westmead, (iii) St Mary’s to Tallawong, and, (iv) WesternSydney Aerotropolis to Macarthur.

Source: Kenanga Research - 20 Nov 2023