Mixed reaction for LRT3-related counters


SHARE prices of companies that are linked to the Light Rail Transit Line 3 (LRT3) project reported mixed results last Friday following the announcement earlier that the project would be funded by the government.

Malaysian Resources Corp Bhd (MRCB) closed half a sen or 0.6% higher at RM0.84, with a market capitalisation of RM3.71 billion.

George Kent (M) Bhd closed one sen or 0.85% lower at RM1.17, with a market capitalisation of RM659.02 million.

WCT Holdings Bhd closed one and a half sen or 1.66% lower at RM0.89, with a market capitalisation of RM1.26 billion.

Meanwhile, in an exchange filing last Friday, WCT Holdings said its wholly owned subsidiary WCT Bhd has executed three novation agreements with Prasarana Malaysia Bhd and MRCB George Kent Sdn Bhd (MRCBGK), a joint-venture company between MRCB and George Kent, in regard to the project secured by WCT Bhd.

WCT Holdings said the novation agreements entail the transfer of all rights, interest, benefits, obligations, duties and liabilities of Prasarana to MRCBGK, subject to the terms and conditions as stipulated in the agreements.

Among the projects that would be involved are Package TD1, for the construction and completion of Johan Setia Depot (Phase 1) and associated works (announcement dated April 5, 2017); Package GS02, for the construction and completion of guideway, stations, park and ride, ancillary buildings and other associated works from Merchant Square to Suria Damansara (announcement dated Oct 5, 2017); and Package GS03, for the construction and completion of guideway, stations, park and ride, ancillary buildings and other associated works from Suria Damansara to Temasya Glenmarie (announcement dated Aug 29, 2017).

“The entering into the novation agreements by WCT has no material effect on the operations and financial position of the company and its subsidiaries (WCT Group),” the company said.

The LRT3 project, which has been a subject of huge debate in mid-2018, is firmly back on track after the signing of a novation agreement between Prasarana Malaysia Bhd, MRCBGK and nine other work package contractors (WPCs) last Friday.

The novation agreement, which is pursuant to the fixed price contract that was signed between Prasarana and MRCBGK on Jan 25, will allow the WPCs to migrate from the previous project delivery partner scheme to the fixed price contract scheme.

Under the new arrangement, MRCBGK is now the turnkey contractor, while Prasarana takes the role as the project’s employer.

The fixed price contract for LRT3 was drawn up in line with instructions by the Ministry of Finance on July 12, 2018; to reduce the project cost to RM16.63 billion.

Nine other companies that signed the agreement were Mudajaya Corp Sdn Bhd, WCT Construction Sdn Bhd, Gabungan Strategik Sdn Bhd, APEX Communications Sdn Bhd, Rahimkon Sdn Bhd, Sunway Construction Sdn Bhd, Pembinaan Jaya Zira Sdn Bhd, SN Akmida Holdings Sdn Bhd and Trans Resources Corp Sdn Bhd.

Connecting Bandar Utama to Johan Setia in Klang, the completion date for the project under the new agreement is set for Feb 28, 2024.

The length of the new line is maintained at 37.6km, but the number of stations has been reduced from 26 stations to 20 stations.