by SHAZNI ONG/ pic by TMR FILE
SEVERAL construction companies in the country have been allowed to resume their works and projects, but with some restrictions from the government, following the extension of the Movement Control Order (MCO) to May 12.
HSS Engineers Bhd announced to the exchange yesterday its associate company, HSS Integrated Sdn Bhd and SMHB Sdn Bhd, have obtained approval from the Ministry of International Trade and Industries (MITI) to operate during the MCO subject to strict compliance with MITI’s standard operating procedure and those of other relevant authorities, which are applicable to the operations of the associate companies.
Affin Hwang Investment Bank Bhd analyst Loong Chee Wei said most listed contractors have applied to resume work on their projects last week, and that some contractors have received approvals by MITI to resume works on certain projects.
“Major projects allowed to resume works next week include the Klang Valley Mass Rapid Train Line 2 (MRT2) above groundworks and Light Rail Transit Line 3 (LRT3) works. Some building works are also allowed to resume,” he said in a sector report yesterday.
Loong noted that MITI imposed some restrictions on the contractors. The restrictions include limited work hours at sites five days a week, health checks at the site entrance, provision of worker transportation, practise social distancing, a minimal number of workers on site, or limited to 50% of usual requirement and encourage work from home for white-collar workers.
“We understand that Sunway Construction Group Bhd has been allowed to resume works on all 10 existing projects including its MRT2 and LRT3 subcontract packages, Tenaga Nasional Bhd’s headquarters and four building projects for Sunway, which include two hospital projects,” he noted.
HSS Integrated has received approval to resume all engineering works with the restriction of up to 50% of its staff requirement in the office or construction sites, while others work from home.
Loong added that some of HSS Integrated’s construction management works on certain projects have to wait for the contractors to be approved by MITI to resume works.
YTL Corp Bhd has gotten the nod to resume works on the Gemas-Johor Baru double-tracking project.
Loong said WCT Holdings Bhd is still allowed to only undertake critical works for the MRT2 and Pan Borneo Highway since late-March, with no new approvals from MITI yet, to resume works for its other projects.
“IJM Corp Bhd has received approvals to resume works on some of its projects, but we have not received details on which projects will resume from the management,” he said.
Loong has maintained an ‘Underweight’ call on the sector and said the firm maintains its earnings forecasts for the construction companies after having factored in slower progress billings in the first half of 2020.
“We remain cautious on the sector due to weak earnings visibility from the MCO impact and order book replenishment concerns,” he said.
The firm’s top picks are Sunway Construction, AME Elite Consortium Bhd and Taliworks Corp Bhd, and has ‘Sell’ calls on Gamuda Bhd, IJM Corp and Malaysian Resources Corp Bhd.