LRT3 to face delay over subcontract work award interference

The said ‘interference’ has caused a ‘big clash’ among Prasarana’s management


THE completion of Light Rail Transit Line 3 (LRT3) project may face another round of delay as the project owner, Prasarana Malaysia Bhd, wants “more say” in the appointment of subcontractors for the project works from its main contractor — MRCB-George Kent Sdn Bhd.

However, the turnkey contractor has refused to do so, according to informed sources.

As a result, MRCB-George Kent has been given “a hard time” on its progress payment by Prasarana, a source told The Malaysian Reserve (TMR).

According to the source, a high- ranking individual in Prasarana had asked MRCB-George Kent to award a work package worth a substantial amount to a particular firm.

This firm, the source claimed, is politically linked to the senior member in Prasarana, hence raising the issue of conflict of interest for the urban public transportation operator.

The source refused to name any personnel or the company involved, but stated that the issue has caused a “big clash” among Prasarana’s management which had led to Prasarana’s president and group CEO Muhammad Nizam Alias going on “temporary leave” as of last month.

Last week, a news portal reported that Muhammad Nizam was suspended from his duty due to unrevealed reasons. Prasarana has not responded to TMR’s query on the matter at this juncture.

“The package involved works worth some RM300 million, which MRCB-George Kent already has its contractors to work on, but there was interference from Prasarana asking the contractor be given to another firm, which is wrong because MRCB-George Kent was appointed as the turnkey contractor.

“It means Prasarana could not dictate who MRCB-George Kent should give the project to. Failing to do so, Prasarana has delayed progress payments to MRCB- George Kent amounting to hundred million of ringgit,” the source told TMR under condition of anonymity.

MRCB-George Kent is a 50-50 joint venture of Malaysian Resources Corp Bhd and George Kent (M) Bhd.

The LRT3 project started in August 2015 with an initial budget of RM10 billion to serve some two million people along the Bandar Utama-Johan Setia route, before costs escalated to a whopping RM31.65 billion.

It was among several mega infrastructure projects reviewed by the federal government after Pakatan Harapan came to power in May 2018.

In July 2018, the LRT3 project resumed with the final total costs reduced by 47% to RM16.63 billion, replacing the project delivery partner model with the turnkey model.

The completion date of the 37.6km rail track was also extended from 2020 to 2024.

In February, The Edge reported that MRCB-George Kent had aimed to complete over 40% of the project by year-end.

“With the current development, it is unlikely the project could reach the targeted schedule as it will also impact MRCB-George Kent’s cashflow. So, it may face some delays again,” the source said.

Read our earlier report


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