PRASARANA Malaysia Bhd has appointed Malaysian Resources Corp Bhd (MRCB) and George Kent (M) Bhd as the project delivery partner (PDP) for the light rail transit three (LRT3), which is estimated to cost RM9bil.
Prasarana Malaysia president and group chief executive officer Datuk Azmi Abdul Aziz says despite the current economic situation, he is optimistic that the project will not encounter cost overruns.
“We will be working closely with the Special Economic Committee, which is looking into how the economy will pick up and how the ringgit will strengthen,” he says at a press conference yesterday.
“It is about working together and getting the latest information from the committee so that we are aligned with the plan of the Government. That’s why we appointed the PDP, to make sure that there are no cost overruns,” he says.
Azmi says that the RM9bil will exclude land acquisition costs. He adds that funds for the project will be financed via the issuance of sukuk, of which the coupon rate will be decided later.
“Local institutions have shown interest on the financing for the project through its sukuk issuance.”
The PDP for the LRT3 project will earn a management fee of 6%.
“The PDP will start work immediately, for approval works and to confirm the technical design characteristics,” says Azmi.
“They then need to work towards the pre-qualification of the contractors that will be invited to participate. We target pre-qualification stage to be completed by December.”
Meanwhile, MRCB executive director Mohd Imran Salim says the company fought hard for the tender, adding that he expects contribution to earnings by the end of next year.
“We hope that with all our innovations and skill sets, we will be able to contribute and deliver the project on time as per the Government’s requirements.
“We have the experience to do so. We also proposed some keysets of innovations, such as how to enhance the construction and mitigate the cost better.”
George Kent director Datuk Keizrul Abdullah says the company has the relevant experience, having been awarded the RM1.1bil Ampang LRT extension work contract in 2012.
“We’ve been involved in the LRT extension and I think we’re the only company doing the systems for railway projects. We have sufficient experience to deliver this project.
“As the PDP, Prasarana will pay us a fee, which is capped at the overall price for the project. So as the project progresses, we would then be seeing a steady income stream coming in.”
It was reported that six joint ventures (JVs) and individual companies were in the running for the LRT3 project. They were the JV between Gamuda Bhd and MMC Corp Bhd, the MRCB-George Kent JV, UEM Group Bhd, Naza Group and China-based partner CSR Zhuzhou Electric Locomotive Co Ltd, Sunway Bhd, as well as WCT Bhd and AlloyMtd group.
Construction work on the 36km LRT3 line will begin in early 2016 and is expected to be completed by Aug 31, 2020.
The LRT3 line is the biggest project by development value to date for Prasarana that is now overseeing the RM7bil Kelana Jaya and Ampang Lines LRT extensions project.
Apart from the RM9bil development cost, Prasarana has also set aside RM1bil for finance land acquisition.
According to reports, Prasarana was not only acquiring land for the sole purpose of building LRT lines and stations but it is also buying more land around the stations for transit oriented development to boost its ridership as well as ramping up its non-fare revenue.
Prasarana is also bidding to be a PDP itself in Penang to undertake the Penang Transport Master Plan.
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