Gamuda shares rise 11%

Azmin says committee set up to reconsider MRT2 underground project

PETALING JAYA: Shares in Gamuda Bhd and MMC Corp Bhd rose after it was announced that the Cabinet had set up a committee to review the underground contract that was awarded to MMC-Gamuda for the mass rapid transit 2 (MRT2) project.

At 5pm yesterday, Gamuda saw its share price increasing by more than 11% to close at RM2.30, while MMC Corp increased one sen to RM1.13.

Yesterday, Economic Affairs Minister Datuk Seri Mohamed Azmin Ali ( pic) confirmed that a committee had been set up to consider the project’s costing, design and details. He said this on the sidelines of South China Morning Post’s China Conference.

Meanwhile, a source said Gamuda would be setting up a task force of its own to handle negotiations regarding the MRT2 project.

“Cool heads will prevail going forward in settling issues concerning the project,” the source said.

Earlier yesterday, quoting a source, StarBiz reported that the Cabinet had set up a committee comprising four ministers to revisit the project.

According to the source, the four members of the committee are Finance Minister Lim Guan Eng, Works Minister Baru Bian, Transport Minister Anthony Loke and Azmin.

On Wednesday, member of parliament and Finance Ministry (MoF) political secretary Tony Pua had written a scathing letter to MMC-Gamuda, suggesting that the contractor had waged a campaign to overturn the MoF’s decision to cancel its contract for the under- ground works.

A source told StarBiz that as new negotiations take place, MMCGamuda would most likely agree to costs being reduced further, but it will not come down to the level the MoF is looking at.

According to Pua, prior to the MoF’s decision to terminate the contract, MMC-Gamuda had agreed to a cost reduction of RM2.13bil to the contract value of RM16.71bil.

This fell short of the MoF’s expectation of RM4.19bil to RM5.79bil in cost savings for the remaining 60% of works yet to be completed, as advised in a study done by an independent consulting engineer.

The MRT2 line runs from Sungai Buloh to Serdang and ends in Putrajaya. It is to complement the existing MRT line that runs from Sungai Buloh to Kajang.