PUTRAJAYA — All religious activities and the construction of houses of worship must follow regulations stipulated by the authorities, stressed Prime Minister Datuk Seri Anwar Ibrahim.

He said the government has never prevented or restricted any religious activities, but they must be guided by the Federal Constitution.

“Carry out dakwah (preaching), there is no restriction at all. But follow the rules. That is all we ask. I hope this matter can be resolved properly,” he said.

He said this atthe meeting with the staff of the Home Ministry and the Ihya’ Ramadan programme here today.

Home Minister Datuk Seri Saifuddin Nasution Ismail, his deputy Datuk Seri Dr Shamsul Anuar Nasarah, Chief Secretary to the Government Tan Sri Shamsul Azri Abu Bakar and Treasury secretary-general Datuk Johan Mahmood Merican were also present at the function.

On Feb 12, the Prime Minister emphasised that no one has the right to take matters into their own hands outside the framework of the law in issues related to houses of worship. — BERNAMA

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KUALA LUMPUR: All foreign workers in the construction sector will be required to obtain accreditation under the Construction Skills Competency Certificate (SKKP) by 2030, in line with an upcoming government-mandated roadmap for the industry.

The certificate is an official recognition issued by the Construction Industry Development Board (CIDB) to foreign workers employed in the country, indicating that their work skills meet industry standards.

As of December 2025, there were about 600,000 foreign workers in the construction industry nationwide, according to CIDB subsidiary Construction Labour Exchange Centre Bhd (CLAB).

CLAB chief executive officer Datuk Abdul Rafik Abdul Rajis said the low accreditation rate among foreign workers in the sector was alarming.

“In 2024, only five per cent of foreign workers in the construction industry had proper accreditation. Under the CIDB Act 1994, foreign workers are required to be accredited and hold a valid green card.

“Following this, we proposed the accreditation programme last year and managed to accredit almost 10,000 foreign workers between September and December,” he said in an interview with Business Times.

Abdul Rafik added that the Klang Valley accounts for almost half of the total number of foreign construction workers in the country.

He noted that significant efforts are required for CLAB to meet the government’s target of full accreditation of foreign workers in the sector within the next four years.

“We are targeting the accreditation of 50,000 foreign workers this year, exceeding the mandated target of 20,000.

“To achieve this, we need several centres of excellence for the accreditation programme in the Klang Valley, which has thankfully been approved by CIDB,” he said.

BENEFITS OF SKKP

Abdul Rafik said the SKKP would benefit not only workers but also contractors and the government, as it aligns with the 13th Malaysia Plan.

The government aims to reduce the share of foreign workers to 10 per cent of the total workforce by 2030, from the current 15 per cent.

“With accreditation, we will have accurate data on the number of foreign workers in the country and their specific skill sets. This will help reduce the need to bring in additional workers for future projects,” he said.

“For a single project, workers may be needed for specific tasks such as bricklaying or concrete works, but not throughout the entire development cycle. Once a particular phase is completed, these workers can be redeployed to other projects requiring their expertise.

“This is how we can reduce dependency on foreign workers in the long term,” he added.

From the contractors’ perspective, Abdul Rafik said accreditation would upskill their workforce and enhance their competitiveness.

However, he acknowledged that initial feedback from contractors was mixed when the programme was introduced.

“Some contractors thought they had to complete the accreditation process all at once. However, we provided a timeline for the one-time accreditation of their workers, allowing them to plan without disrupting operations.

“My biggest challenge was ensuring contractors understood the importance of accreditation, but once they do, the process runs smoothly,” he said.

The SKKP certificate costs RM600 per employee, with the fee fully borne by the workers.

“This accreditation programme will benefit the industry in the long run, and we are glad to be entrusted with its implementation,” Abdul Rafik said.

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KUALA LUMPUR: Several groups in Malaysia, including a workers’ union and a consumer watchdog, are again pushing for a full ban on asbestos, a material used in construction known to cause cancer.

But industry players and activists say the road ahead won’t be easy, given how similar past efforts went nowhere due to a powerful industry lobby and changes in governments in recent years, as well as the complexity of follow-up measures to fully ban the use of asbestos.

On Jan 6, four organisations renewed calls for the newly appointed Natural Resources and Environmental Sustainability Minister Arthur Joseph Kurup to prioritise and finalise a complete ban of asbestos by 2027.

Asbestos is a group of naturally occurring minerals made up of fine, durable fibres that is resistant to heat, fire and water. Because of these properties, it was widely used in construction, manufacturing and many industrial applications from the late 1800s to the 1980s across the world.

Proponents of a complete ban said it is necessary to protect public health and workers who might improperly handle the material. Global health institutes have said that inhalation of asbestos leads to increased lung cancer risk.

The Consumers’ Association of Penang (CAP), Building and Wood Workers’ International, Health and Safety Advisory Centre (HASAC), and environmental group Sahabat Alam Malaysia insisted there is “no safe level” of asbestos exposure, citing the World Health Organization (WHO) and International Labour Organization.

They pointed to international attempts in the past to play down the dangers of chrysotile asbestos, aimed at supporting the ongoing mining of chrysotile and the manufacture of asbestos-containing products.

Physician T Jayabalan, who leads HASAC, which focuses on public health education and policy advocacy, said governments have a “duty of care” to protect both local and migrant workers.

“It’s not rocket science for you to ban it,” he told CNA.

“It’s about the administration being aware, and they should be sensitive to it because of the fact that this is not only an environmental but also a public health issue.”

COMPREHENSIVE PLAN NEEDED

If Malaysia does impose a full ban, the next step would be to implement a comprehensive plan to manage and eventually remove the existing asbestos in the country. But some experts say this process could be time-consuming and expensive.

Malaysia’s former environment minister Nik Nazmi Nik Ahmad told CNA there remains “broad agreement” within the government on a phased approach towards a full ban, but that more details should come from the ministry.

CNA has approached the Ministry of Natural Resources and Environmental Sustainability for comment.

There is no mining or milling of asbestos in Malaysia. Of the six types of commercial asbestos, the country only allows the import of one – chrysotile, also known as white asbestos – although it cannot be used in government-built schools, clinics and hospitals since 1999 and all government buildings since 2005.

This means government buildings, schools, hospitals, factories and low-cost flats built between the 1950s and 1980s in Malaysia are likely to contain asbestos. They are commonly seen in roofing shingles and cement walls as well as ceiling and floor tiles.

There are no acts or regulations prohibiting the use of asbestos in private buildings.

Medical experts say breathing in the ultra-thin asbestos fibres – which are released into the air when the material cracks – can lead to an increased risk of lung cancer.

Asbestos-related diseases include mesothelioma – a cancer of the chest lining and abdominal cavity – and asbestosis, in which the lungs become scarred with fibrous tissue.

According to the Global Cancer Observatory, 27 mesothelioma cases were reported in Malaysia in 2022, a figure projected to increase to 51 in 2045.

The WHO has stated that the most efficient way to eliminate asbestos-related diseases is to stop using all types of asbestos.

The CAP said it has raised awareness on the negative effects of asbestos since the 1980s. In 2001, and more recently in July 2024, it submitted memorandums to the government calling for a total ban on the material.

As of September 2025, 72 countries and territories – including Japan, South Korea and Taiwan – have imposed national bans on chrysotile asbestos mining, importation, production and use, according to the International Ban Asbestos Secretariat.

In Southeast Asia, Singapore has banned the use of asbestos in buildings since 1989, but many old buildings in the city-state still contain asbestos. Other countries in the region either have no or partial asbestos bans.

INDUSTRY LOBBY STILL EXERTING PRESSURE

Lobbying by the chrysotile industry in Malaysia has led to its continued use and “false belief” that chrysotile can be used safely, said Mageswari Sangaralingam, chief executive of CAP.

“We believe that the chrysotile industry group derailed the proposal for a ban in Malaysia by diminishing the dangers of chrysotile,” she told CNA.

“However, it is evident that all forms of asbestos, including chrysotile, are hazardous to human health.”

The International Chrysotile Association maintains that chrysotile is much safer than the other five types of commercial asbestos called amphiboles, and that many countries have allowed “controlled use” of chrysotile instead of banning it.

While the association admitted there is no consensus about what the safety threshold is for exposure to chrysotile asbestos, it claimed the “scientific community” recognises that this threshold “does exist”.

“The confusion purposely maintained by opponents to safe chrysotile use is due to confusing two families of fibres, without distinction, despite the fact that the type, geological source, use and effects on health are radically different,” said a brochure by the Asbestos Institute available on the association’s website.

Jayabalan from HASAC said Malaysia should have been able to “easily defang” the chrysotile industry lobby in the name of environmental and health safety. He claimed that the “powerful” lobby knows where it can apply pressure in terms of administrative sections that deal with occupational safety regulations.

The International Chrysotile Association told CNA it does not comment on “unproven allegations of this nature”.

“Malaysia has adopted and implemented an internationally recognised policy of controlled and safe use of chrysotile, which has been in place for many years,” a spokesperson said.

“This policy has been aligned with the country’s regulatory framework, occupational safety standards and public health systems, and it has not resulted in any demonstrated epidemic of asbestos-related diseases.”

Beyond the lobbying, CAP’s Mageswari said subsequent attempts for an asbestos ban were “quashed by an unstable government with frequent changes of leadership and ministers”.

But the four groups calling for the ban acknowledged that Nik Nazmi, the former environment minister who held the portfolio from 2022 to 2025, had “laid the groundwork” for a safer Malaysia.

Nik Nazmi announced in January last year that Malaysia was considering a full ban on asbestos, and a month later confirmed in parliament that the government was looking at a “phase-down approach” of stopping the use of chrysotile.

The Hazardous Chemicals Management task force was studying a gradual cessation of asbestos use, he said, with several laws being mulled to implement the ban.

Nik Nazmi told CNA he believes that since he left the ministry, a technical committee on implementing the ban had met and recommended a timeline.

“There was some industry pushback and while we took that into account, priority was given on health and safety considerations as pushed for by health and consumer advocates,” he said.

“There was a push (from the industry lobby) for a longer phase-down, but we came up with a shorter one.”

The asbestos lobby asserted that all construction materials contain elements “likely to be harmful” to workers’ health if used incorrectly.

“Workers must make sure they are using the appropriate equipment and recommended work methods, regardless of the materials they use. This is true for chrysotile, as well as for many other substances that are sometimes more harmful,” said the Asbestos Institute brochure.

REAL RISK OF ASBESTOS EXPOSURE

The reality in Malaysia, however, is that renovation contractors are asking their foreign workers to handle asbestos without the proper skills and protective equipment, Jayabalan said.

“(The worker) finishes his renovation, he is exposed to this dust, he doesn’t even know that he is exposed to it,” he said.

“When he goes back to his country of origin, he develops this deadly disease, which is either mesothelioma, lung cancer, asbestosis or whatever it is.

“Treatment is very disappointing in the sense that it’s like giving a person a death sentence; you have about so much time to live.”

While Malaysia’s Department of Occupational Safety and Health (DOSH) has established procedures for the handling and disposal of asbestos, Jayabalan said many contractors ignore them due to the administrative hassle and costs involved.

“It’s also the constraints of the system … The easy thing to do is ban it. Then you are cleared of this deadly material,” he said.

Jayabalan also shared pictures of asbestos being improperly disposed of in Malaysia, calling this a “double jeopardy”.

“Why? Number one is exposure to the worker. Then, there is the environmental exposure, meaning in the immediate vicinity, the (asbestos) dust is now made available,” he added.

Hisham Yahaya, general manager of Safe Asbestos Solutions, told CNA that DOSH can legally stop such improper work, but this is often hard to detect as it occurs in areas not visible from main public roads.

And if part of an asbestos roof shingle is damaged, for instance, it is cheaper to replace that part with new asbestos instead of swapping out the entire roofing with an asbestos substitute like cement cladding, Hisham said.

Hisham said his company handles at least two to three projects a month mainly for corporate clients, involving the detection, management and removal of asbestos, in places like factories, embassies and on board ships in Malaysia and the region.

While bigger multinational and local companies are cognisant of the dangers posed by asbestos, smaller businesses and homeowners might not have the same funds or awareness, he said.

“A lot of the older low-cost housing built by the government has asbestos, and should the government highlight the dangers of asbestos, people might go into a panic stage,” Hisham said.

These residents could then demand that authorities cover the cost of removing the asbestos, or threaten to vote out the government of the day.

“That’s the tricky part; it’s more on political will,” he said.

A BAN – THEN WHAT NEXT?

When Hisham was asked why he thinks the government has not fully banned asbestos until now, he said a ban must be followed up with a multi-decade plan on how to handle the existing asbestos in the country.

This includes tracking the age of buildings that contain asbestos and deciding whether their asbestos components can still be mitigated or should be replaced.

“The phasing-out will actually take years,” said Hisham, referring to the Netherlands as an example.

In the late 1970s, the Netherlands banned the amphibole asbestos crocidolite. “Non-glued” asbestoses were forbidden a few years later and from the early 1990s onwards a total ban on asbestos was issued.

With that said, Hisham said he feels the current government should take the first step of banning the import of all types of asbestos, before educating people on how to manage the risks of existing asbestos, like painting over damaged asbestos parts.

“You cannot do it overnight because of the costs associated with it,” he added.

In terms of follow-up measures, CAP’s Mageswari said the government should identify consumer products containing asbestos, and ban imports of these products as well.

“The government should also ensure asbestos waste transportation, management and disposal strictly comply with the law, and provide guidance on asbestos removal procedures,” she said.

Jayabalan from HASAC said the government should develop a nationwide registry of all asbestos-containing material, and take the opportunity to replace them when there are major renovation works on affected buildings.

Homeowners who wish to renovate their homes can check this registry, and if asbestos is present, inform DOSH for it to be removed safely at no cost, he said.

“A ban doesn’t even mean immediately you’re going to solve the problem. It takes some time, but it’s a start of your attempts at mitigating the problem,” he added.

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KUALA LUMPUR, Jan 16 — The construction sector is expected to see robust job flows in 2026, amid healthy contract flows anchored by infrastructure projects and sustained data centre rollouts, according to Hong Leong Investment Bank Bhd (HLIB).

In a note today, HLIB anticipated that headline job flows will run at a similar pace to 2024-2025, which remains adequate to expand the sector’s order book.

“In our view, the key anchor remains hyperscale data centres where 2026 could see larger campuses begin to take shape — contractors broadly can still add to their order books from the data centre segment as well as infrastructure projects.

“Alongside data centres, we see the water segment as another order book driver in 2026, with multiple large schemes at different stages of rollout,” it said, while maintaining an “overweight” rating on the sector.

Additionally, the investment bank also believed that the Penang LRT project should continue to generate more job flows via subcontracts, segment 2 and systems works, with the latter two potentially amounting to around RM8 billion.

“Separately, 2026 should see a continued build-up of the Johor-Singapore Special Economic Zone (JS-SEZ) supported by Budget 2026’s RM3.4 billion infrastructure development fund, and we expect further progress on the proposed Johor Bahru Elevated Autonomous Rapid Transit (E-ART) system.

“Finally, MRT3 is not expected to be a material award driver in 2026 as land acquisition likely occupies most of the year — as such, meaningful tender reactivation and awards are more likely to be pushed beyond 2026,” according to HLIB. — Bernama

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KUALA LUMPUR (Jan 5): The government has extended the service tax exemption on construction contracts signed before July 1, 2025 by one year, now valid until June 30, 2027. Eligible agreements without reviewable clauses can enjoy a total of two years of exemption.

The Ministry of Finance (MOF) in a statement on Monday announced the new decisions by Prime Minister Datuk Seri Anwar Ibrahim on the sales and service tax policy.

It said construction of religious buildings such as suraus, mosques, temples, churches, and shrines remains exempt from service tax. It has been exempt since July 1, 2025.

The announcement came on top of tax measures effective Jan 1, 2026 to support businesses and control costs for consumers announced by Anwar during his New Year message earlier on Monday.

These include:

• Service tax on rental services:
  • Rate reduced to 6% from 8%
  • Exemption threshold for small and medium enterprises (SMEs) raised from RM1 million to RM1.5 million
  • Newly established SMEs exempt from service tax on rental for one year, starting from registration
• Zero-rated sales tax applies to critical inputs used by registered manufacturers in animal feed, fertiliser, and pesticides, aiming to stabilise prices of essential goods.

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KUALA LUMPUR (Dec 28): Our cover story for the final issue of the year discusses the evolution of townships in Malaysia, from basic structures to full-fledged master plans today. Property consultants note that rising land costs, changing lifestyles and higher consumer expectations have driven developers to adopt master-planned approaches that combine homes with schools, healthcare, retail, workplaces and recreational spaces.

Modern townships now prioritise walkability, placemaking, SME-centred commercial spaces and proper maintenance plans for long-term value. The future of these townships looks a lot brighter, according to the consultants, with the help of advanced technologies, renewable energy and nature-based solutions.

In the same issue, we look at key highlights shaping Malaysia’s 2025 real estate industry, including the launch of the Penang LRT Mutiara Line, progress on the Johor Bahru–Singapore Rapid Transit System, as well as several large-scale developments such as the launch of affordable housing projects and industrial parks.

A poll of property consultants from across the world reveal that the global real estate landscape in 2025 was cautious due to higher interest rates and inflation. Industrial and logistics assets continue to attract strong interest due to supply chain constraints and demand from e-commerce and manufacturing sectors.

Residential sectors remain resilient in cities facing housing shortages, while prime offices and retail centres showed signs of recovery. The consultants also shared what to expect in 2026.

Additionally, this issue explores architectural excellence through a visual showcase of iconic sporting venues around the world. The featured stadiums highlight how design can transform large-scale infrastructure into cultural landmarks.

Our final My Space column for the year is by Master Builders Association Malaysia (MBAM) president Oliver Wee. According to him, the construction industry experienced a roller-coaster year, balancing policy uncertainty with positive milestones.

Looking ahead, MBAM expects growth in 2026, supported by government infrastructure spending, data centre investments and renewable energy projects, despite ongoing cost and regulatory pressures.

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PETALING JAYA: Regular audits, safe construction methods and stiffer punishment are needed to better protect Malaysian road users against hazardous falling construction materials, say experts.

Assoc Prof Dr Law Teik Hua of Universiti Putra Malaysia said while there are laws that provide a safety framework for construction sites such as the Occupational Safety and Health Act 1994 and the Occupational Safety and Health Department regulations, they do not cover road user safety.

“The law available tends to promote the safety of the workforce on the construction site rather than traffic safety.

“A case can also be made about developing legislation that will address the safety of temporary structures hanging over the road,” he said when contacted.

On Nov 18, a woman narrowly cheated death when her car was crushed by a temporary scaffolding pole at the East Coast Rail Link construction site on the Middle Ring Road near the Gombak toll plaza.

As for punishment, Law said most violations usually include fines and possible imprisonment but are deemed ineffective as a genuine warning measure, especially in large-scale development projects.

“To ensure accountability with regard to the law, the punitive measure has to be raised substantially and in direct correlation to the project’s value and the extent of the risk posed.

“More profoundly, the legal framework has to stop being squeamish about awarding custodial sentences to the management of guilty corporations regarding gross negligence over safety standards,” he added.

Law said a multi-pronged approach is needed to address the issue, which includes using the latest structural monitoring equipment for project sites.

Among ways to improve safety, he said, are using resilient protective netting against falling materials, protective “overhead shelters” or “tunnels” covering project site entrances and exits, and stringent safety practices when handling materials at elevated levels.

Road Safety Marshal Club founder and president K. Balasupramaniam said those involved in managing project sites should carry out regular independent safety audits.

“Preferably, checks should be done before work is carried out, especially involving temporary structures or large signboards,” he said.

Balasupramaniam said members of the public and non-profit organisations could also play their role in reporting potential danger at project sites to bodies such as the Construction Industry Development Board.

“Project developers must also be made to submit regular audit reports to the local enforcement authorities to ensure their site is safe not only for their own workers but also road users.”

Regarding insurance claims, he said victims could claim damages from project developers, regardless whether the mishap occurred on a public or private road with public access.

“Since 2007, after intervention by Bank Negara, the law is clear: Even if an accident occurs on a private road with public access, it is deemed a public road,” he said.

While supporting stiffer punishment, he said it should only be used as a last resort.

“We should take preventive measures. Don’t wait for something to happen and only then react and start pointing fingers,” he added.

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Artificial intelligence is transforming the construction sector, saving costs and enhancing efficiency and management, with its usage expected to further expand in the future, experts said.

AI has been integrated throughout the lifecycle of construction, including cost estimation, construction management, and bidding and settlement.

China Construction Third Bureau Digital Engineering Co Ltd said more than 70 percent of its new projects have applied AI.

For example, when reviewing the design drawings of a large commercial building’s structure, AI was used to automatically identify conflicts between water, electricity, heating and ventilation.

It can save designers time checking details with each other, and help avoid waste and delays during the construction phase from the very beginning, said Gao Zezhou, director of the AI research centre of the company, at a recent building industry expo in Wuhan, Hubei province.

At construction sites, AI video analysis systems automatically identify risks such as workers not wearing safety helmets, unauthorised entry, smoke and fire, and can send real-time alerts.

Drones are used to collect data, completing real-scene 3D reconstruction of 240,000 square meters of a construction site within 25 minutes when building a community in Yichang, Hubei.

Besides, the “quality hazard identification large model” helps identify typical quality defects by analyzing on-site images and assists in generating rectification notices. AI is also used in the review of bidding documents, Gao added.

“AI excels most at solving several problems that traditional human labour cannot addres,s such as real-time processing of massive data like spotting hidden dangers through thousands of videos, optimised decision-making for complex systems like giving the most ideal solution for multiple goals in cost, construction period and resources. It transforms the experiences of masters into knowledge that can be replicated and promoted,” he said.

Gao said leading enterprises in the industry have generally entered the exploration and pilot phase of AI application. In the next three to five years, the adoption rate of AI in large-scale engineering projects will exceed 90 percent.

During the construction of an exhibition and conference complex in Zhengzhou, Henan province, China First Metallurgical Group Co Ltd used AI to optimise the allocation of mechanical equipment to increase effective working hours. Steel components were coded and traceable to avoid losses, cutting costs by about 5.225 million yuan ($734,635), said Shi Jiaolan, deputy chief engineer of the company, at the expo.

Li Yaqin, deputy general manager of digital building technology center of Central South Architectural Design Institute Co Ltd, said AI can generate high-quality renderings, aerial views and even interior visualisations in real time, with one-click adjustments to styles, materials and lighting ambience.

AI can also be integrated with the environmental analysis of architectural design. By analysing wind environment, carbon emissions, noise and other factors, it provides decision-making recommendations to guide designers in optimising design.

Zhang Yue, general manager of the construction strategy business department of software and cloud service provider Yonyou Network Technology Co Ltd, said the application of AI in the construction industry is growing rapidly and he expects AI will be fully integrated into key business scenarios of the construction industry in the next three to five years.

In addition, by establishing carbon emission models through AI, simulation calculations for architectural design can be conducted to realise low-carbon goals, he added. – China Daily/ANN

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BUTTERWORTH: Datuk Seri Anwar Ibrahim has directed that all infrastructure projects be expedited in the interests of the people and the country’s economy.

The prime minister said Malaysia’s globally-recognised performance opens up many investment opportunities for the country.

This, he said, would require infrastructure aspects to be improved because guaranteed infrastructure is a priority for investors.

“This means, (it is a) necessity for the federal government to formulate policies and cooperation (together with) progressive and efficient state governments. This truly helps. So, I hope we maintain peace and safeguard the interests of the nation and the people’s interests.

“Not many countries are able to achieve what we do because of the spirit and interest. We are never perfect, and I have never claimed that we are perfect.

“If there are weaknesses, we must correct them. Delays (in projects) should not happen and projects need to be expedited.

“(That is why) we strongly object to corruption (which is the cause of delays), and it is still happening.

“We (the government) issue warnings and give full clearance to the MACC (Malaysian Anti-Corruption Commission), police, and IRB (Inland Revenue Board) to proceed (with investigations) because that is their responsibility.

“So, we managed to collect a large amount of funds, saving the country from leakages, wastages and corruption. (But), the agenda is not yet complete,” he said.

Anwar said this at the groundbreaking ceremony for the Traffic Dispersal Project between the Juru and Sungai Dua toll plazas at the Seberang Jaya Expo Site.

The prime minister said the traffic dispersal project, aimed at overcoming congestion, was one of the projects which was both needed and long-awaited for by the people, not only in Penang but also in other northern states such as Kedah.

“Events like this demonstrate the importance of infrastructure for the people’s comfort. That is paramount.”

Anwar mentioned the Kerian Integrated Green Industrial Park (KIGIP) in northwestern Perak, bordering with Penang, saying that the matter of traffic congestion was brought up by investors.

“(The investors) said there is a port and an airport in Penang, but the roads are congested. When the investors brought this up, I gave my assurances that we would solve the problem and today, Alhamdullillah, the first phase (of solving it) has been completed,” he said.

For the record, the project which covers 17.3km and cost RM3 billion, aims to disperse traffic to resolve local congestion issues that disrupt the national economy, especially in the northern region of Peninsular Malaysia.

The problem of traffic congestion between the Juru and Sungai Dua toll plazas of the North-South Expressway has long been a complaint for highway users and local residents.

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PETALING JAYA: The construction sector is expected to sustain its momentum into the fourth quarter or 4Q of this year on sustained public and private infrastructure project executions.

There are several high-profile projects which are running concurrently, and these include the Penang light rail transit (LRT) Mutiara Line packages two and three, the KL mass rapid transit circle line, the Penang Airport expansion, Phase 2 of the Pan Borneo Highway, the Sabah-Sarawak Link Road, the Subang Airport redevelopment and the Johor LRT and automated rapid transit.

According to Kenanga Research, the construction sector would also be supported by continued interest in data centre investments into the country. It noted recently two US-based technology giants, Microsoft and Pearl Computing, had acquired land in Malaysia for data centre expansion.

“Gamuda Bhd had sold a 389-acre parcel of land in Springhill Industrial Park, Port Dickson, to Pearl Computing for RM455.2mil in May, alongside RM1bil in enabling infrastructure works.

“This positions Gamuda well for future projects on the site, which can support 800 to 1,000MW of data centre capacity, translating into RM14bil to RM20bil worth of contracts,” Kenanga Research said.

It also noted current valuations for larger capitalised construction stocks remain close to their five-year high averages.

“The construction sector has outperformed this year, largely driven by the data centre boom, with the KL Construction Index up 8% in the year-to-date versus the FBM KLCI’s minus 3% performance.

“Within our coverage, Sunway Construction Group Bhd (SunCon) led the gainers, followed by Kimlun Corp Bhd and Gamuda. Valuation-wise, the bigger caps, Gamuda, SunCon and IJM Corp Bhd, are trading at 2026 forward price-to-earnings ratios of 19.2 times, 21.8 times and 17.8 times, compared to their five-year averages of 18.3 times, 23 times and 17.1 times, respectively,” the research house said.

It maintained its “overweight” call on the construction sector on persistent demand from data centres, fuelled by sustained capital expenditures from global technology firms.

All stocks under its coverage are rated an “outperform”, it noted.

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