Plaintiff ‘did not know’ contract sum for double-track project

KUALA LUMPUR: A railway expert claimed he “did not know” when asked if a Rm360mil contract sum for work, including overseeing the systems work for the Northern DoubleTrack Project, was much higher than industry standards.

SCG Infrastructure Sdn Bhd CEO Mansur Ghazali said the industry standard for setting a contract sum, including the base cost and expected profit, was about 2.4 to 2.5 times the base cost.

Mansur is one of four plaintiffs in a Rm360mil suit against Mmc-gamuda for its alleged failure to award a contract worth Rm360mil to the plaintiffs.

The suit was brought by Mansur, Scomi Group CEO Shah Hakim, NR System Sdn Bhd and Newfields Advisors Sdn Bhd CEO Seow Lun Hoo against the firm.

Mansur said the base cost, which included staff, travel and vehicle maintenance costs, had been agreed (between the plaintiffs and Mmc-gamuda) at Rm43mil.

To prove that the contract sum requested by the plaintiff was higher than industry standards, Mmc-gamuda Joint Venture Sdn Bhd counsel Ranjit Singh calculated a hypothetical contract sum multiplying the Rm43mil base cost by three, higher even than the 2.4 to 2.5 multiplier suggested by Mansur.

“The base cost of Rm43mil times three is around Rm120mil, easily a 200% profit. And yet the contract sum you ask for is Rm360mil,” said Ranjit.

When asked if Rm360mil was above industry standards, Mansur, a railways expert with 30 years’ industry experience, claimed he “did not know”.

The plaintiffs’ statement of claim said Mmcgamuda handling director Lin Yun Ling had approached them to revive the Rm12bil rail project in February 2006 after the project was suspended in December 2003.

It also said there was an agreement between NR System and Mmc-gamuda in 2007 to be awarded the ER contract for the system works for the Northern Double-track Project.

The claim is seeking damages amounting to Rm360mil.

The trial continues today.