HSL’s 2012 maiden contract marks a first of many over the next few months

Posted on February 15, 2012, Wednesday

KUCHING: Hock Seng Lee Bhd’s (HSL) recent contract win for the construction of the road from Balingian to Jalan Persekutan in Sarawak is in line with the view that construction projects in East Malaysia could finally gain some traction in the coming months.
“HSL’s subcontract agreement with PN Construction Sdn Bhd is reportedly worth RM82 million and its scope of works includes earthworks, drainage and culverts, road and bridges,” OSK Research Sdn Bhd (OSK Research) said in its research report.
The work on the project was slated to be completed in the first quarter of 2014. OSK Research noted that the recent award marked HSL’s maiden contract win for financial year 2012 which the research house deemed was in line with its expectations.
“Our financial year 2012 order book replenishment for HSL stands at RM400 million,” the report added.
OSK Research opined that the latest award tied in with its view that the slow-moving construction projects in East Malaysia could finally gain some traction, with the Sarawak Corridor of Renewable Energy (SCORE) leading the way.
Although the flow of contracts had slowed down substantially in recent months due to insufficient funding from the Federal Government, the research house believed that a ‘turn in fortunes’ could occur in the run-up to the general election.
AmResearch Sdn Bhd (AmResearch) echoed these beliefs in its own research report as it stated that this could be the start of a series of job awards this year to Sarawak’s construction players in tandem with SCORE.
“Notably, Baligian is the site of Sarawak Energy Bhd’s (SEB) proposed RM3 billion coal-fired power station. We understand that HSL is actively bidding for participation in energy-related projects,” the report said.
The research house also pointed out that HSL now had RM1.7 billion worth of projects in hand of which RM1.1 billion was outstanding.
“The company can see potential projects from the remaining packages of the Kuching central sewerage system worth approximately RM1.7 billion, additional flood mitigation packages worth RM250 million in Sibu, the development of a port and additional water treatment plants at Samalaju and some others in the pipeline,” according to AmResearch.