MRCB-George Kent’s win with RM11.5 billion LRT3 bid shocking, say industry insiders

KUALA LUMPUR (Sept 14): Putrajaya has been urged to reconsider its decision to appoint Malaysian Resources Corp Bhd (MRCB) and George Kent (M) Bhd as its project delivery partner for the Light Rail Transit 3 (LRT3) from Bandar Utama to Klang.

A source in the industry said that although Prasarana Malaysia Berhad had announced the appointments of MRCB and George Kent at a press conference on Sept 4, there were many unanswered questions as the consortium had tendered a higher price than the cost of RM9 billion determined by Prasarana.

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.

A source close to the selection process for the LRT3 project said the announcement appointing 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.

"Although the company claimed that the delay was not due to them, it had still given Prasarana a poor image as the owner of the nation's LRT.

"In addition, MRCB's appointment as George Kent's partner to form a consortium to bid for the LRT project is also strange as MRCB was better known as a developer in the commercial sector and not in the transport industry," the source told The Malaysian Insider on the condition of anonymity.

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

UEM is also a subsidiary of Khazanah Nasional, a company wholly-owned by the government and would have a better chance at winning the bid because of its good track record in building LRT lines.

"The UEM group was involved in constructing the LRT and MRT, including an extension to the Ampang line and extensions to the Kelana Jaya line," the source said.

In addition, the UEM consortium was proven to be successful in implementing the Bumiputera agenda, as was shown in the previous LRT project.

The source said that if the UEM consortium was chosen for the LRT3 project, 45% of the contract package would be given to Bumiputera contractors.

According to another source close to the Selangor palace, the failure of the UEM group to win the contract had also gained the attention of the palace as one of the companies in the UEM partnership - ISY - was well-versed in land matters in Selangor.

He said ISY's abilities were important for the process of taking over land in Selangor as the entire project is based in the state, and ends in Klang, its royal city.