Infrastructure Contracts Worth RM12 Billion to RM14 Billion Set for H2 Awards in Malaysia
Public infrastructure contracts valued between RM12 billion and RM14 billion are slated for award in the second half of 2026, according to MBSB Research. This upcoming pipeline aims to bolster order book replenishment for major construction firms as activity under the 13th Malaysia Plan (13MP) gathers momentum.
The Bottom Line
- Project Pipeline: RM12 billion to RM14 billion in public infrastructure awards are lined up for the second half of 2026.
- Key Catalysts: Major packages include the Penang LRT Mutiara Line, Langat 2 Phase 2, Sungai Rasau Phase 2, and the Kerian Water EPCC project.
- Sector Health: Construction sector output expanded 6.6 per cent year-on-year in Q2 2026, supported by private data centre developments.
Mapping the Second-Half Infrastructure Pipeline
The construction sector in Malaysia is entering a critical execution window. According to MBSB Research analyst Ming San Soong, the visible project pipeline for the remainder of the year is anchored by several high-value developments. The rollout is designed to counteract a slight moderation in broader macroeconomic growth while feeding steady cash flows into top-tier contractors.
The headline project in this wave is the Penang LRT Mutiara Line’s Civil Main Contract 2 package. Carrying an estimated project value of RM4 billion to RM5 billion, the tender is targeted for November 2026. Simultaneously, Langat 2 Phase 2 has entered the procurement stage following pre-qualification for Packages 1 and 2, with an estimated price tag of RM3 billion to RM4 billion.
Water-related infrastructure also dominates the near-term landscape. Sungai Rasau Phase 2 is valued at an estimated RM2 billion to RM3 billion, while the Kerian Water engineering, procurement, construction, and commissioning (EPCC) project has moved closer to implementation. The Kerian initiative follows the signing of a 40-year bulk water supply agreement in July, positioning Gamuda Bhd (KLSE: GAMUDA) as a direct beneficiary.
Data Centres Drive Private-Sector Momentum
While public infrastructure provides baseline stability, private-sector developments continue to reach significant levels. Data centre construction awards reached RM9.72 billion in the first eight months of 2026, outpacing the RM9.26 billion recorded for the entirety of 2025, as reported by MBSB Research.
Furthermore, the average award size expanded to RM972 million, up from RM892 million in 2025. This reflects an industry shift toward hyperscale facilities. Analysts expect up to six large-scale data centre facilities—valued between RM1 billion and RM2 billion each—to finalise awards in the second half of 2026, cementing data centres as the sector’s key private-sector growth engine.
This private-sector boom helped push the broader construction sector to a 6.6 per cent year-on-year expansion in the second quarter of 2026, compared with 7.7 per cent in the first quarter.
Financial Overview of Key Construction Catalysts
| Project Name | Estimated Value | Anticipated Timeline / Status | Notable Beneficiaries |
|---|---|---|---|
| Penang LRT Mutiara Line (CMC 2) | RM4.0B – RM5.0B | Targeted for November 2026 award | Not specified |
| Langat 2 Phase 2 | RM3.0B – RM4.0B | Procurement stage (Packages 1 & 2) | Not specified |
| Kerian Water EPCC | RM4.0B – RM5.0B | Implementation phase post-July agreement | Gamuda Bhd |
| Sungai Rasau Phase 2 | RM2.0B – RM3.0B | Upcoming water-related packages | Not specified |
Regional Allocations and Medium-Term Catalysts
Looking past the immediate H2 awards, administrative tailwinds point toward accelerated execution heading into 2027. Sabah and Sarawak remain central to this expansion. Under the 13MP, RM93.9 billion has been allocated to six less-developed states for roads, water, electricity, and connectivity infrastructure.
A significant share of the planned 2,800 kilometres of new rural roads will concentrate in these regions. Major medium-term projects—such as the second phase of the Pan Borneo Highway at RM15 billion, the second phase of the Sarawak-Sabah Link Road at RM7.4 billion, and the RM31 billion MRT3 rail project—provide multi-year revenue visibility.
Execution speed across these mega-projects is expected to favor Gamuda Bhd, IJM Corp Bhd, Malaysian Resources Corp Bhd and WCT Holdings Bhd, alongside East Malaysia-focused contractors as infrastructure rollout accelerates.
With the RM430 billion development expenditure envelope under the 13MP (averaging approximately RM86 billion annually) serving as a benchmark, market participants are now eyeing the upcoming 2027 Budget for additional allocations toward basic development and regional connectivity.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
