Gamuda aims RM8b in orderbook replenishment

The target is an optimism driven by the roll out of several rail-based mega projects in the country

By NG MIN SHEN / Pic By ISMAIL CHE RUS

GAMUDA Bhd has set a construction orderbook replenishment target of between RM6 billion to RM8 billion for the next two years, an optimism that is driven by the roll out of several rail-based mega projects in the country.

“The RM6 billion to RM8 billion range is our normal ball-park target. Our current orderbook stands at RM8 billion and will last us for three years,” Gamuda MD Datuk Lin Yun Ling (picture) told the media after the company’s AGM in Kuala Lumpur yesterday.

Lin said the group is also open to the possibility of participating in the turnkey contractor tender for the Mass Rapid Transit Line 3 (MRT3).

“If the opportunity arises for us to bid, then of course we will bid, but at the moment we are fully focused on the underground works for MRT2,” he said.

He said detailed ground mapping works for the project that had just been completed indicated that four of the 12 tunnel boring machines (TBM) will face “very challenging mixed soil conditions”.

Nevertheless, the group, together with its joint-venture (JV) partner in the project, MMC Corp Bhd, is fully prepared to take on the challenge over the next two years.

Meanwhile, he said that Gamuda’s chances of securing the project-delivery partner (PDP) job for the Kuala Lumpur-Singapore high-speed rail are “anyone’s guess”.

“We will do our best to make a successful bid. Our partnership with MMC Corp is good, and we also think it’s good to partner (with them) now and then with a government-linked company,” Lin said in reference to the group’s JV with Malaysian Resources Corp Bhd, which was formed to bid for the PDP tender.

He also noted that if foreign funding is acquired for mega projects such as the MRT3 and the East-Coast Railway Link, foreign participations would have to be dealt with and that could dampen local economic benefits.

“Most fellow contractors are concerned about the supply chain being overstretched with many big projects coming up. Subcontract prices have not moved up much yet, but over the next two to three years when other new projects come in, we will have to manage that.

“Foreign contractors could ease the pressure on the supply chain but this could remove the benefits of localisation,” Lin said. As better results are expected from the rail-based projects, the group’s property division has set a target to achieve RM3.5 billion in sales for the financial year ending July 31, 2018 (FY18).

The projected positive performance would be driven equally by its overseas and domestic projects. The division recorded sales of RM2.4 billion in FY17.

Lin said the group’s overseas property projects have been doing well, with 56% of sales in FY17 contributed by said projects, particularly its township developments in Vietnam.

He added that the engineering, property and infrastructure company’s capital expenditure for FY18 will not be very large as sizeable investments will be on hold, with the group focusing mainly on new town-ships, TBM and Industrialised Building System factories.