Klang Valley Double Tracking contractor dismayed by tender cancellation

Unless formally informed, the contractor intends to continue to perform its obligations to ensure the project is delivered on time and without delay

by DASHVEENJIT KAUR/ pic credit: dmiagrp.com

DHAYA Maju-LTAT Sdn Bhd, which was reawarded the Klang Valley Double Tracking 2 (KVDT2) project after a retender, is dismayed by the termination of the contract by the Perikatan Nasional (PN) government.

CEO Datuk Mohamed Razeek Hussain said there was no legal or factual justification in Transport Minister Datuk Seri Dr Wee Ka Siong’s statement and intent made last Friday.

“Until and unless formally informed, as a responsible contractor, we intend to continue to perform our obligations, under the contract, to ensure the project is delivered on time and without delay,” he said in a statement yesterday.

Mohamed Razeek was referring to Wee’s statement that the KVDT2 project will be reopened for tender after the PN government found that it costs a lot less than what was previously cited for.

“At the outset, Dhaya Maju-LTAT wishes to clarify that they are the duly appointed contractors for the KVDT2 pursuant to a Letter of Award (LoA) dated Aug 19, 2019, and there is no legal or factual justification whatsoever for the minister’s statement and intent.

“The minister’s statement has further failed to accurately reflect and describe the background to this award,” he said.

He also emphasised his dissatisfaction on the sudden rush to terminate the contract.

“The government needs to consider the direct impact to the economy during this Covid-19 pandemic, as well as look into lead time statistics and cost of termination.

The sites will be left idle. “The live tracks, adjacent to stretches where we have removed the rail and ballast, risks deterioration and movement which will be a danger to the trains and passengers,” he added.

To recall, Dhaya Maju-LTAT had initially received the original LoA on April 4, 2018, for the KVDT2 project during the tenure of the Barisan Nasional (BN) government following which they had commenced work.

When the Pakatan Harapan (PH) government took over, the original KVDT2 award was terminated on Oct 19 that same year.

“Having accepted there was no basis to terminate the initial LoA, the PH government on July 5, 2019, agreed to reappoint Dhaya Maju-LTAT to implement the KVDT2 project and the parties entered into a settlement agreement under which the government agreed to issue a new LoA.”

In return, Mohamed Razeek said Dhaya Maju-LTAT waived all its claims against PH for the wrongful termination after which they were appointed to continue with the project under the LoA dated Aug 19, 2019, at a lower contract sum.

The contractor agreed to slash the cost by 15% to RM4.47 billion from RM5.26 billion.

Wee also said that a ministry-assigned consultant Opus, a subsidiary of Khazanah Nasional Bhd, had stated in October 2018 that the project’s actual cost was RM3.39 billion.

He noted that the reduced contract sum was derived at after a series of value management and value engineering labs that were undertaken with the participation of all stakeholders and led by technical experts from the Finance; Economic Affairs; and Transport Ministries, Keretapi Tanah Melayu Bhd (KTMB), Railway Assets Corp, the Land Public Transport Commission, Department of Irrigation and Drainage and the Public Works Department.

“We are therefore dismayed and perplexed by the minister’s statement based on some report in respect of the costs of the project which we are unaware of.

“For the record, the works are being presently monitored by professional consultants and all claims are checked and verified before any approval for payment. There is in place strict financial monitoring under the watch of the superintending officer on the KVDT2 project,” Mohamed Razeek said.

Sharing on the updates of the KVDT2 project, he highlighted that it has achieved a healthy progress of 24%, which is made possible with a dedicated 1,512 employees under Dhaya Maju-LTAT and 261 numbers of supply and services companies.

More than 7,000 job opportunities were created under the services, supplies and maintenance sectors.

In total, the company has made a total investment of RM350 million to procure machinery and specialised railway equipment to achieve timely project completion.

This is in addition to circa RM120 million value of civil engineering machinery the company owns.

“Dhaya Maju-LTAT received the LoA on Aug 19, 2019, and was formally given site possession on Sept 3, 2019.

“Our possession of railway machinery, sufficient supply of materials and homegrown, well-disciplined and skilled manpower, has given strong evidence to both governments BN and PH into awarding the contract to us,” he said.

Mohamed Razeek attested that his company will also continue to engage with the government and relevant stakeholders to ensure the KVDT2 project and the interest of the public are not compromised or jeopardised.

“KVDT2 is an important component for the enhancement and improvement of public transport in the Klang Valley. Any delays to the progress will make the public, especially commuters, suffer.

“The minister’s unjustified call for the reopening of tender for the KVDT2 project will almost inevitably and contrary to his statement, delay the project bringing untold misery to the public and commuters,” he said.

The KVDT2 is one of the 101 projects, which was recently revealed in Parliament as having been given out by the PH government through direct negotiations.

The second phase of the KVDT2 project covers the rehabilitation of two KTMB railway tracks measuring over 110km between Salak South and Seremban, and between Kuala Lumpur Sentral and Angkasapuri to Port Klang.