By NUR HANANI AZMAN / Pic by MUHD AMIN NAHARUL
MMC Gamuda Sdn Bhd has shot back at allegations made by Damansara MP Tony Pua (picture) in his Part II media statement as his response to former prime minister Tun Dr Mahathir Mohamad.
Gamuda Engineering Sdn Bhd MD Justin Chin Jing Ho said Pua’s statements against MMC Gamuda were unfounded and libelous.
“Your misrepresentation of events and portrayal of the ‘truth’ in numerous instances in your statement were disingenuous at best. Our response will be brief and is intended to set the record straight, presenting the facts for all to examine
“We reiterate that your libelous allegations against MMC Gamuda were uncalled for and we ask that you remain professional in any future public exchanges between your goodself and Dr Mahathir. We do not appreciate your playing to the gallery and grandstanding at our organisation’s expense,” he said in a statement on Friday.
Gamuda Engineering is a subsidiary of local engineering and construction giant Gamuda Bhd, which with MMC Corporation Bhd formed MMC Gamuda for the Klang Valley Mass Rapid Transit (MRT) project.
Pua recalled an open letter he penned in October 2018 to defend himself from accusations from Dr Mahathir.
Among allegations mentioned by Pua against MMC Gamuda in his letter was the nature of the RM8.82 billion that was cut from the project, to which Chin clarified that the savings from the MRT2 review exercise were derived from provisional sums, reimbursables and contingencies (35%).
He said these are common cost provisions for mega infrastructure projects of this scale and complexity given the nature of unknowns on such projects but any unexpended sums would have eventually been returned to the government or people anyway.
“It also derived from scope omissions and specification reductions (60%) and remainder from reduction in MMC Gamuda margins (5%). 5% of the RM8.82 billion savings were derived from MMC Gamuda’s forgone margins as part of the negotiations in converting from the Project Delivery Partner (PDP) to the Turnkey Contractor model.
“The conversion to the lump sum Turnkey Contractor model shifted the risk matrix primarily to us but also allowed for greater control overall and thus enabled a reduction in fees for lump sum margins” he added.
Chin said the appointed independent engineering consultant hired by Pua had no relevant track record of comparable complex multidisciplinary mega infrastructure projects, particularly for underground tunnelling works and systems.
“Put simply, they would not even be prequalified to tender as the design consultant for a project of this scale and complexity anywhere in the world but their study was used to guide your assumptions of ‘very significant savings to be achieved without sacrificing the functionality, viability and operations of the project’,” he added.
Chin said MMC Gamuda, jointly with the MRT Corporation Bhd (MRTC), had recommended at the time to appoint an internationally qualified consultant of his own choosing with a respectable and relevant track record to conduct a fair, informed review of the project cost but Pua chose to disregard this for reasons unknown to them or to the public.
Chin added that allegations that MMC Gamuda had made countless trips to Dr Mahathir’s office is fiction as he believed that this would not help.
“Our arguments presented to him in writing were exactly as set forth here which were also presented to the Ministry of Finance and your appointed independent engineering consultant.
“This included all of our technical rebuttals, which MRTC jointly concurred with, to the ‘potential savings’ opined by the appointed independent engineering consultant,” he said.
On Pua’s statement that large-scale contractors were prepared to bid at a lower price, Chin said that his assertion that other contractors could do it for a significantly lower price is speculative and unproven.
“It is incredulous to even consider that a ‘right’ price could have been offered in this manner when the procurement of such complex mega infrastructure projects typically takes upwards of six months at a minimum to reasonably assess from a blank canvas, much more so given that the project was already 40% underway with many complicated interfaces and considerations unknown to external contactors,” he said.
He said after Pua’s open letter to MMC Gamuda, many engineers and site operatives from MMC Gamuda took it upon themselves to highlight the injustice of the situation on their personal social media channels.
“They were neither asked to or compelled to do this by the Directors of MMC Gamuda but were genuinely afraid of losing their jobs given the sudden termination decision and acted on their own free will.
“We do however recall clearly that we had to manage further escalation of the sentiment due to the rising outrage after you issued your open letter in 2018 with a sarcastic “wow” remark trivialising their livelihoods – “You sought sympathy claiming the loss of jobs for no less than 20,000 people (wow!)”,” he said.