MRT3 development boosts construction sector outlook, contract awards expected by 2027
In a note today, RHB Investment Bank Bhd (RHB IB) said it expects details to be announced during the upcoming tabling of the 13th Malaysia Plan on July 31, 2025 or Budget 2026 on October 10, including the funding mechanism, latest estimated cost and whether a fresh round of re-tendering is required.
'Recall that in the revised Budget 2023, tabled in February 2023, the government announced its intention to review the cost of the MRT3 project in the hope of reducing the total amount to below RM45 billion from the estimated RM68 billion in 2018.
'We envisage MRT3 contract awards and construction to likely commence in 2027,' it added.
It has maintained an 'Overweight' call on the sector.
Separately, MBSB Investment Bank Bhd (MBSB IB) expects a re-tender exercise to be called by mid-2026, with contracts to be awarded between the end of 2026 and the middle of 2027, towards the end of the land acquisition exercise.
MRT Corp sought four extensions for the project's tender validity. No extensions were sought after the last one in March 2024. This means the tenders would have naturally lapsed, MBSB IB said.
'We believe there would also be some changes to the project's original alignment and the placement of stations, considering the reduction in plots of land for acquisition.
'Construction of the MRT3 may begin in 2027. This will keep contractors busy up to 2033. This will be a timely continuation of projects following the expected completion of the Johor-Singapore Rapid Transit System and the East Coast Rail Link by the end of 2026,' MBSB IB said. It is maintaining a 'Positive' recommendation on the sector.
The MRT3 Circle Line is a 51 km orbital alignment to serve the perimeters of Kuala Lumpur. The alignment is expected to be 39 km elevated and 12 km underground, with 22 elevated stations, seven underground and three future stations. — BERNAMA
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