NPE extension set to unlock RM5.6bil in economic benefits: analysts
The NPE extension has received official approval from the Ministry of Works, signalling a major step forward in Kuala Lumpur's infrastructure upgrade under the Traffic Master Plan 2030.
IJM Corp Bhd confirmed that the RM1.4 billion project—initially cancelled in 2012—has been revived through renewed government engagement. As a fully private initiative, IJM will fund the construction in full.
Spanning 15 kilometres, the fully elevated highway will connect the Pantai Dalam Toll Plaza to the Jalan Istana interchange via Jalan Syed Putra. The extension will enhance traffic flow by integrating the NPE with the Besraya and the upcoming Laluan Istana Kiara Expressway (by Ekovest).
The improved link is expected to divert up to 40 per cent of traffic from Jalan Bangsar into central Kuala Lumpur.
IJM currently holds a 34-year concession (with about 12 years left before the extension) for the 19.6-km NPE, a key corridor connecting Subang Jaya to the capital, with major toll points including Pantai Dalam, PJS2, and PJS5, as well as the Kuchai Link and Pantai Sentral Park interchange.
The NPE was constructed between 2000 and 2004, with the expressway officially opening to traffic on April 30, 2004. The project was led by Road Builder (M) Holdings Bhd, which was acquired by IJM in 2007.
Datuk Lee Chun Fai, IJM's group chief executive officer and managing director, said the approval marks a key milestone in the group's ongoing efforts to improve urban mobility throughout the Klang Valley.
Other than NPE, IJM also wholly owns Besraya (M) Sdn Bhd, whose concession to operate the 28.9km Sungai Besi Highway ends in 2046 (previously 2040 before toll restructuring in 2022); a 50 per cent stake in Lebuhraya Kajang-Seremban Sdn Bhd, which has a concession to run the 44.3km Kajang Seremban Highway (Lekas) through 2064 (previously 2039); and an effective 41 per cent shareholding in the 233km West Coast Expressway Sdn Bhd, which is 80 per cent controlled by publicly traded WCE Holdings Bhd.
IJM has a 26.65 per cent stake in WCE, and its wholly owned Road Builder has a 20 per cent direct stake in the West Coast Expressway.
It also has four highways in India: the 79km Chilakaluripet-Vijayawada Tollway; the 19.8km Dewas Bypass Tollway (under construction); the 109km Solapur-Bijapur Tollway (under construction); and the 56km Western Access Tollway in Buenos Aires, Argentina.
Brokerages have responded positively to the news.
CIMB Securities said the project will immediately contribute RM1.4 billion in internal contracts to IJM's construction division while reinforcing its strategy to grow toll infrastructure assets and recurring income streams.
For the nine months ended December 31, 2024, IJM's toll segment reported a 58 per cent year-on-year decline in core pre-tax profit to RM27.1 million, impacted by RM53 million in associate losses.
NPE and Besraya collectively posted RM96 million in pre-tax profit, a 7.2 per cent YoY decline.
CIMB maintained its 'Buy' rating on IJM, with an unchanged sum-of-the-parts-based target price of RM3.26.
It said the project's RM1.4 billion contribution is within its FY26F new contract win estimate of RM4 billion.
However, it has not yet factored in earnings contributions from the expanded concession pending further updates.
Public Investment Bank Bhd also reaffirmed its 'Buy' call and TP of RM3.26, echoing that the brownfield project fits well with IJM's long-term toll infrastructure strategy and would deliver meaningful recurring revenue.
"We make no changes to our earnings forecast, as the expected order book accretion of RM1.4 billion from the NPE extension is within our new contract win estimates of RM4 billion for FY26F.
"Similarly, we have not factored in any contributions from the expanded NPE concession pending further updates on its operational parameters."
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