More On Melewar's RM2.2Bil MonoRail Bid

I got a copy of OSK's report on the Construction sector.

Here is what they said.

• Fears Coming True
  
  Yesterday, it was mentioned on the Business Times and Bloomberg that Malaysian Prime Minister, Ahmad Badawi said that some infrastructure projects under the 9MP may be delayed due to escalating costs. He also commented that on the casualty list is the 2 nd Penang Bridge. Factors in which he cited that had delayed the bridge’s construction include (i) getting the required land, (ii) need to ensure that the given design is most suited and (iii) the issue of escalating costs. According to some sources, the delay would last for about 9 months.
  
  In other news, it was mentioned on the Financial Daily that proposed bullet train linking Kuala Lumpur and Singapore by YTL Corp has been shelved by the EPU. The reason cited for their decision was because the financial model submitted would involve significant costs to be borne by the government.
  
  COMMENTS
  
  From uncertainty to reality. Previously we had highlighted 2 key sector risks associated with the recent political change namely, delay risk and non commencement risk. This recent announcement is testament that the former is becoming an inevitable truth. Rewinding back the clock, the 8MP saw 35% of its projects being carried forward to the 9MP. Rising costs, political risks and poor execution provide us minimal reason to argue why history will not be repeated.
  
  Other projects also at risk. Based on recent media reports, it can be said that the 2 nd Penang Bridge is one of the few key projects that both political parties have agreed on its necessity. Despite this mutual view, possible delays have already been highlighted. This implies even greater risks for other projects where mutual views are not shared. Various media sources have stated that the initial RM3bn bridge could now cost > RM4bn due to escalating costs. In our view, rising costs could also see an alteration in the bridge’s design (e.g. removing the 2 view decks). We continue to maintain our view that the NCER has the highest political risks amongst the 5 corridors and investors should avoid the NCER play. We think the SCORE provides a safer exposure to Malaysia’s growth corridors.

How?

It makes me wonder about Melewar's rm2.2bil monorail proposal.