RHB IB upbeat On ECRL, Keeps 'Overweight' On Construction

KUALA LUMPUR, Oct 28 (Bernama) -- RHB Investment Bank Bhd (RHB IB) remains upbeat about the progress of the East Coast Rail Link (ECRL) project, maintaining its ‘Overweight’ call on the construction sector, with Gamuda Bhd, Sunway Construction Group Bhd and Binastra Bhd as its top picks.

The investment bank said it recently reviewed the ECRL stretch between Kuantan and Gombak and was encouraged by the progress made.

“According to the Transport Ministry, the ECRL project reached 87 per cent completion as of August. Under Budget 2026, the government highlighted that phase one (Kota Bharu to Gombak) is on track for completion by end-2026,” it said in a note today.

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RHB IB noted that the latest cost estimate for the ECRL, revised in December 2022, stands at RM50.3 billion. The project covers the construction of a 665 km railway line with 20 stations, running from Kota Bharu to Port Klang.

It also includes the Serendah Bypass to facilitate cargo movement from the north, and a rail extension from the Jalan Kastam station to both Westports and Northport terminals.

According to Malaysia Rail Link, the value of contracts awarded to local companies involved in the ECRL stood at RM18.6 billion as of July 1, exceeding the initial target of RM10.8 billion.

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RHB IB said the next phase of the project is expected to involve a 25 km spur line connecting Jalan Kastam station to Northport and Westport, known as section D.

“Bids for section D are reported to range between RM600 million and RM900 million, with construction expected to begin by end-2025 and be completed by December 2027,” it said.

The investment bank added that a potential catalyst for the project is the proposed ECRL extension to Rantau Panjang, Kelantan, on the Thai border, which remains at the preliminary discussion stage.

-- BERNAMA