LRT3 project expected to resume in second half
MRCB in process of redesigning rail project
KUALA LUMPUR: The Light Rail Transit 3 project (LRT3), which has stalled for almost a year following a review by the Pakatan Harapan government, is expected to resume in the second half of this year, said Malaysian Resources Corp Bhd (MRCB).
“We have signed an agreement with Prasarana Malaysia Bhd, right now we are in the process of redesigning the project and expect to start work in the second half,” MRCB group chief financial officer Ann Wan Tee told reporters after the group’s EGM yesterday.
He said 10% of the work had already started and that the contractors had already received half of the payments earlier this month.
“Effectively, it is not our obligation to pay the contractors. The payments come direct from Prasarana to the contractors,” Ann said.
The LRT3 project, which is a 36-km train track connecting Bandar Utama to Johan Baru in Klang, was under review last year in light of the revelation by the Finance Ministry (MoF) that the total cost of the line had ballooned to RM31.65bil.
Following the findings, last July, the government approved the continuation of the LRT3 project at a reduced final cost of RM16.63bil, almost half of the original cost including land acquisition and interest.
This resulted in a series of negotiations between the MoF, Prasarana and the project’s main contractors MRCB and George Kent (M) Bhd.
Towards this end, last month MRCB-George Kent Sdn Bhd entered into a fixed-price contract with Prasarana, the project owner, instead of adopting a project-delivery-partner (PDP) model.
MRCB and George Kent MRCB were appointed the PDP of LRT3 in Sept, 2015 at an approved construction budget of RM9bil.
MRCB chief operating officer Kwan Joon Hoe said the LRT3 project is valued at RM11.8bil and is expected to be completed in 2024.
Additionally, MRCB had received full support from its shareholders for the disposal of its highway-asset Eastern Dispersal Link Expressway (EDL) in Johor.
Chief corporate officer Amarjit Singh Chinna said the disposal marked the end of MRCB’s corporate transformation programme, which was to reduce the company’s debts.
He pointed out that the firm’s net gearing level is now about 0.25 times from 1.7 times when the firm first started the programme.
“Generally, we are in a pretty good shape and have a strong balance sheet to fund growth,” he said.
Chhina said that the transaction of EDL was already completed and that the government had paid MRCB about RM1.3bil for the highway.
MRCB had also disposed a 80% stake in Bukit Jalil Sentral Property Sdn Bhd (BJSP), the special purpose joint venture company undertaking the development of Bukit Jalil Sentral, to the Employees Provident Fund for RM1.07bil last year.
Shares of MRCB ended marginally higher yesterday at 73.5 sen. On a year-to-date basis, its share price has risen more than 18.7%.