Date: 09-Jul-2015

The RM16bil Sarawak stretch of the Pan Borneo Highway can boost key contractors in the country’s largest state, including Naim Holdings Bhd, Zecon Bhd, Cahya Mata Sarawak Bhd and Hock Seng Lee Bhd.

CIMB Research construction analyst Sharizan Rosely said these companies were among those that were likely to be in a position of strength when bidding for the multi-billion contract.

He noted that the RM27bil highway is the biggest non-tolled road project that would benefit Sabah and Sarawak.

“Over time, it would spur development of new areas similar to the impact of the North-South Expressway. The Sarawak stretch will kick off first under the project delivery partner (PDP) model,” said Sharizan.

Sarawak-based company Lebuhraya Borneo Utara Sdn Bhd is the PDP for the 1,090km toll-free stretch of the Sarawak side.

The Pan Borneo project spans a five to eight-year development period, and based on CIMB Research’s estimated cost per km of RM15mil, each package for Sarawak would cost between RM600mil and RM11bil depending on its length.

In his report, Sharizan also pointed out that Gamuda Bhd had expressed interest to bid for a slice of the Pan Borneo job, although the group’s interest remains preliminary and it is highly selective at this point.

However, he noted that tender visibility for the Pan Borneo project was lacking.

“Our channel checks surfaced scant detail about the tender timeline, but we are relatively clear about the four main packages which will begin this year and in 2016, comprising three road upgrade works and one new road.”

It was reported that work on the first phase involving a stretch of 773 km is expected to begin in September 2015.