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Cabinet to deliberate on MRT2 underground deal

 

KUALA LUMPUR (Oct 18): Finance Minister Lim Guan Eng said yesterday he will bring up the matter of the termination of MMC-Gamuda KVMRT (T) Sdn Bhd’s contract to build the underground portion of the mass rapid transit Line 2 (MRT2) for further deliberations at the next cabinet meeting.

That’s because the cabinet was the one to pull the plug on MMC-Gamuda’s underground work contract of the MRT2, he added.

“Let’s wait for the next cabinet meeting because I was not at the previous cabinet meeting as I was in Bali last week to attend the Asean ministers’ conference. So, let me get back to you after the next cabinet meeting to update on the present situation,” he told reporters at Parliament lobby.

“On this matter, bear in mind it was a cabinet decision. So, if there are changes, they have to be decided by the cabinet,” Guan Eng added.

On Oct 7, he had announced that the federal government will be re-tendering all the unfinished underground work of the MRT2 project through an international open tender process.

 He had also announced the termination of the underground work contract after the government and MMC-Gamuda failed to reach an agreement relating to a reduction in the construction cost.

However, MMC-Gamuda had lamented that the joint venture, which is equally owned by Gamuda Bhd and MMC Corp Bhd, was not being given a fair chance to work out the cost reduction for the underground works as the finance ministry did not reveal the target it wanted to achieve. 

It had also warned that it would result in immediate job losses of over 20,000 personnel involved in the underground works from a supply chain of over 600 Malaysian companies.

Subsequently, Prime Minister Tun Dr Mahathir Mohamad had said the government will review its decision to open the international tender process for the underground works.

On Oct 11, The Edge Financial Daily also reported that four ministers, led by Guan Eng, will be involved in the renegotiation. They are Economic Affairs Minister Datuk Seri Mohamed Azmin Ali, Transport Minister Anthony Loke and Works Minister Baru Bian.

Gamuda shares closed down one sen or 0.41% at RM2.42 yesterday, bringing a market capitalisation of RM6 billion. However, shares of MMC settled at RM1.14, up one sen or 0.89%, valuing it at RM3.47 billion.
 

This article first appeared in The Edge Financial Daily, on Oct 18, 2018.

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