IJM likely to get more than half of Europlus highway job

KUALA LUMPUR: Kumpulan Europlus Bhd (Europlus) is expected to hand out more than half of the RM7.07 billion contract to build West Coast Expressway to IJM Corp Bhd, analysts said.

Europlus could give IJM Corp up to RM4 billion worth of job to help build the highway from Banting in Selangor to Taiping in Perak, they said.

Meanwhile, Europlus' shares rose to its nine-month high after announcing on Thursday that it had officially obtained the government's approval for the concession.

The stock rose 5 sen to close at RM1.36 yesterday, its highest since April 8 last year, with 123,857 shares changing hands.

ECM Libra Investment Research said in a statement yesterday that IJM is expected to get RM4 billion of construction works from the project. The balance of the work will go for open tender to other contractors.

Maybank Investment Bank expects IJM to feature prominently, especially in the project management and physical construction of some sections.

"What is not known is the length of the construction period, which we suspect to be at least five years," it said.

MIDF Research, meanwhile, said IJM's outstanding order book may rise up to RM10 billion, assuming it manages to secure half of the total project. "This is also assuming that the New Pantai Expressway extension project will be awarded to IJM in the fiscal year 2013.

"Excluding the West Coast Expressway project, IJM's outstanding order book stands at RM4.7 billion with the new Klang Valley Mass Rapid Transit project," it said.

On Thursday, Europlus announced that 64.2 per cent-owned West Coast Expressway Sdn Bhd (WCE) had obtained an approval letter from the Public Private Partnership Unit of the Prime Minister's Department on the West Coast Expressway project.

WCE is a 22.7 per cent associate of IJM.