MRT3 is model switch to turnkey to save billions of ringgit, says chief

KUALA LUMPUR: The decision to switch the Mass Rapid Transit 3 (MRT3) project delivery structure from a project delivery partner model to a turnkey model can help save billions of ringgit, MRT Corporation (MRT Corp) chief executive officer Datuk Seri Shahril Mokhtar said.

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

“If we have the opportunity to save the rakyat’s money, saving its costs by using this method, why not? We must do better than Line 1 and 2. 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 MRT Line 3 updates yesterday.

Shahril said the turnkey contractor would be selected through an open-tender system for which bidding would start from Wednesday (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 percent 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 turnkey contract by forming a consortium or a joint venture with foreign players who have the technical expertise, he added. — Bernama