LRT3 project bidders had to meet strict standards, says Prasarana

KUALA LUMPUR (Sept 29): Not all of the seven companies that bid for the Light Rail Transit 3 (LRT3) project met stringent assessments set by Prasarana Malaysia Bhd, the project owner said.

Datuk Zohari Sulaiman, chief executive officer of Prasarana subsidiary, Prasarana Rail and Infrastructure Projects Sdn Bhd, said this in a statement today in reference to the seven shortlisted from 11 bidders who participated in the pre-qualification tender in November last year.

Earlier this month, Prasarana named MRCB-George Kent Joint Venture as the project delivery partner (PDP) for the LRT3 project from Bandar Utama to Klang. The company was selected from the seven in a closed tender.

The other six who took part in the tender exercise were IJM Corporation Bhd, MMC Corp-Gamuda Joint Venture, Naza TTDI – CSR Zuzhou Electric Locomotive Joint Venture, Sunway Construction Berhad, UEM Group Berhad and WCT-Alloy MTD Joint Venture, Zohari said.

"The PDP was selected after a series of stringent evaluations at various levels, including the minister of finance incorporated, being the largest shareholder of Prasarana.

"It is worthwhile to note that not all the seven tenderers, including those with years of experience, met the stringent assessments," Zohari added.

The Malaysian Insider previously reported a source as saying that the appointment of MRCB-George Kent had shocked the industry as George Kent was known to have problems in the construction of the Ampang Line LRT extension, which was completed a year later than scheduled.

According to the source, many analysts thought UEM was better equipped and experienced to build the LRT3 as it had previously been involved in such projects.

According to documents sighted by The Malaysian Insider, George Kent's tender had offered the price of RM11.5 billion, the third lowest of six tenders submitted, for the project.

The UEM consortium, meanwhile, had submitted a tender for RM9.88 billion while the lowest bid was for RM9.5 billion.

However, Zohari said that the PDP for the LRT3 project was selected based on stringent criteria, including detailed evaluations on technical requirements, project management, resource deployment, incentive plan and experience.

"Under technical requirements, tenderers were evaluated based on the conceptual designs for stations, operations control centre, depot, and system works, in addition to providing the lifecycle cost analysis evaluation framework.

"These allowed the tenderers to demonstrate their understanding in developing and evaluating the design proposal with lifecycle cost considerations," Zohari said.

Zohari added that under the PDP strategy, upon meeting the project timelines and various key performance indicators including safety and quality, the PDP would be entitled to a fee of 6% of the tender award sum, which is estimated at RM9 billion. 

He added that similar to the MRT Line 2 model, the 6% fee would not be applicable on overheads.

"As an incentive to the PDP, it would earn a bonus if the overall project cost is less than the RM9 billion estimated," he said.