Gamuda’s Order Book Set To Rise 11 Pct with Sungai Perak Water Project

KUALA LUMPUR, Feb 6 (Bernama) -- Gamuda Bhd’s participation in the Sungai Perak Raw Water Transfer Scheme (SPRWTS) development project could potentially bump up Gamuda’s outstanding order book by about 11 per cent to RM41.1 billion.

In a research note today, CIMB Securities Sdn Bhd said the expectation is well within Gamuda’s end-2025 target of RM40 billion to RM45 billion.

It said participation in the SPRWTS project would account for 20 per cent of the research house’s forecast for the financial year 2026 new order book assumptions for Gamuda.

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“Additionally, we believe that the group is well-positioned to secure water-related infrastructure works worth RM3 billion to RM4 billion for the Ulu Padas Hydroelectric Dam by end-Feb 2025, having already clinched a 75 per cent share in the construction of the 188 megawatt (MW) Ulu Padas hydroelectric power plant (with the remaining 25 per cent held by Conlay Construction),” it said.

CIMB Securities also highlighted that aside from addressing the region’s domestic water supply needs, the SPRWTS project is expected to support development within the Kerian Integrated Green Industrial Park and enhance irrigation in the district upon its completion by 2029.

“Additionally, our channel checks indicate that the SPRWTS will eventually be expanded to facilitate the supply of treated water to Penang.

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“Penang needs a second major water resource (apart from Sg Muda), especially within the fast-growing southern Seberang Prai region. This aligns with the Penang Water Supply Initiative 2050,” it added.

CIMB also estimated that the project could cost up to RM4 billion. 

In terms of its projected capacity, up to 1,500 megalitres (mld) of water could be extracted from Sungai Perak to meet the daily water requirements of northern Perak and Penang.

“We expect Gamuda and Perak State Development Corporation to finalise the exclusive agreement by end-2025 before construction works start in 2026.

“As a key rakyat-centric initiative under Budget 2025, we believe that Gamuda will emerge as the main contender to undertake construction works for the SPRWTS, while Perak Water Board, the sole service licensee for the state’s water supply management, is expected to manage the water facility when it is completed,” CIMB Securities added.

Meanwhile, on the funding of the project, CIMB Securities said that the Ministry of Finance’s wholly owned entity, Pengurusan Aset Air Bhd, which financed the 80 mld Kerian Water Supply Scheme in Perak, is likely to be roped in to fund the project.

It maintained its “buy” rating on Gamuda with an unchanged target price of RM6.

At 12.47 pm, Gamuda rose six sen on the main market of Bursa Malaysian and traded at RM4.44 per share, with 12.31 million shares transacted.

-- BERNAMA