Pic By TMR

The decision to switch the Mass Rapid Transit Line 3 (MRT3) project delivery structure, from a project delivery partner model to a turnkey model, can help save billions of ringgit, MRT Corp Sdn Bhd CEO Datuk Seri Shahril Mokhtar (picture) said.

He said this would enable MRT Corp to seek the best financing option as 80% of the works entail boring and tunnelling which would cost a lot of money.

“If we have the opportunity to save the rakyat’s money, saving costs by using this method, why not? We must do better than MRT1 and MRT2.

“At the end of the day, it is about project delivery and efficiency, and lowering boring cost. I think most of us would want to have this at the right cost,” he told reporters during a briefing on MRT3 updates in Kuala Lumpur yesterday.

Shahril said the turnkey contractor would be selected through an open-tender system, for which bidding would start from tomorrow (tender briefing) until Dec 25, and the successful bidder would be known by mid-February next year.

In order to qualify and participate in the tender process, MRT Corp said prospective applicants must meet the minimum financial capacity of having a paid-up capital and a shareholder’s fund of not less than RM5 billion.

As for the financing proposal, MRT Corp said it should include a minimum financing period of 30 years and moratorium period of eight years, while the margin of financing must not be less than 90% of the expected total project cost.

Shahril cited Hanoi, Jakarta and New Delhi as among cities that had used the turnkey with financing concept in rail construction, which turned out to be great.

He said the project delivery structure would not put Malaysian companies at a disadvantage, as many of them have the capability to handle the works and arrange for financing.

Local civil infrastructure companies can bid for the turn-key contract, by forming a consortium or a joint venture with foreign players who have the technical expertise, he added.

“I also would like to stress that this new financing model is an option which we are providing the market. If the financing terms, which the tenderers present, are all not competitive, we still have the right to go back to Danalnfra Nasional Bhd to seek funding for the project,” he said.

In a tender notice released early this month, MRT Corp said MRT3 is expected to span 40km, stretching 30km underground with a total of 26 stations.

Research house CIMB Equities Research had in September forecast the project would cost between RM35 billion and RM40 billion.

Meanwhile, Shahril said he expected the proposed MRT3 railway scheme would be approved by the Land Public Transport Commission by December 2018, and construction works could start as early as the third quarter of 2019. — Bernama