Government infrastructure projects in the pipeline are painting a brighter picture for the construction sector in 2017, making it a potential bright spark for the building industry in the coming year.
Among the projects that will be in the spotlight are Mass Rapid Transit 2 (MRT2), Tun Razak Exchange (TRX) in KL and Petronas’ Refinery and Petrochemical Integrated Development (Rapid) project site in Pengerang. These will collectively boost the order books of infrastructure construction players for the year.
Additionally, upcoming projects such as the RM12.8 billion Sabah portion of the Pan Borneo Highway as well as the recently announced go-ahead for the KL-Singapore High Speed Rail (HSR) project will add some buzz to potential private development activity.
Market experts say the HSR project, in particular, could spur development in various subsectors once the route has been finalised, as many private developers will be keen to build in new hotspots that will open up as a result of the project.
However, they caution that development activity may still not be as buoyant as in the previous years as the property development cycle will continue to be soft this year.
“Property construction activities are not going to be as buoyant. This is in view of the property development cycle, which will continue to be soft this year,” he said.
Apart from benefitting from the Pan-Borneo Highway, Sabah also sees the redevelopment of Kota Kinabalu (KK) Port with an estimated gross development value of over RM5 billion.
The port redevelopment project, which includes the Sabah International Convention Centre, comprises the development of One Jesselton, Jesselton Quay, and KK Convention City. These will be developed by the Suria-Gabungan AQRS joint venture, SBC Corp Bhd-Suria JV and Mah Sing Group Bhd respectively.
According to Affin Hwang Capital, Suria also plans to acquire 28.9 acres at KK Port for about RM350 million to develop an international cruise terminal as part of the integrated mixed development project.
Under the 11th Malaysia Plan 2016-2020, a key focus for Sabah’s development is to invest in infrastructure to improve connectivity within the state and international linkages.