LRT3 to proceed at total cost of RM16.6b under fixed-price contract

PETALING JAYA: The government has agreed to continue with the Light Rail Transit Line 3 (LRT3) from Bandar Utama (Petaling Jaya) to Johan Setia (Klang) project at a total cost of RM16.6 billion under a fixed price contract regime.

In a filing with Bursa Malaysia, George Kent (Malaysia) Bhd said MRCB George Kent Sdn Bhd was informed by Prasarana Malaysia Bhd of the government’s decision via a letter dated Oct 16.

The RM16.6 billion includes land acquisition costs, interest payments during construction and other costs while the implementation concept will be remodelled from a project delivery partner (PDP) to a fixed price contract.

To recap, George Kent and Malaysian Resources Corp Bhd (MRCB) were appointed the PDP of LRT3 on Sept 4, 2015 at an approved construction budget of RM9 billion.

In March, Prasarana requested an additional RM22 billion in government guarantee to ensure funding for the construction and completion of LRT3. This was on top of a RM10 billion bond facility guaranteed by the government in 2015.

However, in July, the Finance Ministry said it would not support additional funding for the 37km project unless Prasarana cut the cost of the project, which was estimated to rise to as high as RM31.45 billion.

On Bursa Malaysia today, George Ken leaped 12.87% or 13 sen to close at RM1.14 with 18.58 million shares traded, making it one of the top gainers and top active stocks on the bourse.

MRCB surged 10.42% or 7.5 sen to close at 79.5 sen on volume of 84.23 million shares. It was the most actively traded stock on the bourse today.

The revised deal comes less than a week after the government said it would review an earlier plan to terminate and retender MMC Corp Bhd and Gamuda Bhd’s underground works contract for MRT2.

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