Construction Bina Puri-UEM to clinch LCCT 3rd package?
It was reported in the Edge Weekly that Bina Puri together with its JV partner UEM is close to securing the third package of the new LCCT worth RM1.1bn. This is for the terminal and satellite building. The total contract value of the entire LCCT project is RM2bn.
The article said that the Bina Puri-UEM JV might have beaten other players like Sunway, MRCB, Fajarbaru Builder and the Gadang Holdings-PPC JV.
This appears to be not consistent with a Business Times article that Malaysia Airports had shortlisted 5 companies - the UEM-Bina Puri joint venture, Sunway Construction, the AHT Norlan-Carriage joint venture, IJM Corp and the Gadang-PPC joint venture. We are not aware that MRCB was bidding for the LCCT project.
If this materialises, it will be a small negative for IJM (BUY, TP RM6.00) and Sunway (BUY, TP RM1.95). For IJM, our FY10 order win assumption is RM600m (after formalising the RM600m Besraya contract) while for Sunway it is RM800m.But we do not discount both players opting for subcontractor roles given their strong niche in building jobs. On the more positive side, we expect newsflow to pick up for both IJM and Sunway with an impending government-to-government signing between Malaysia and India on more infrastructure related spending. Both IJM and Sunway have strong track records in India.