MRCB-George Kent JV bags RM11.86b LRT3 job for Bandar Utama-Johan Setia portion

KUALA LUMPUR (Nov 5): MRCB-George Kent Sdn Bhd, a joint venture company between Malaysian Resources Corp Bhd (MRCB) and George Kent (Malaysia) Bhd, has bagged an RM11.86 billion contract to build the Light Rail Transit Line 3 (LRT 3) project from Bandar Utama to Johan Setia.

In separate filings with Bursa Malaysia today, MRCB and George Kent said they have received a letter of appointment (LoA) from Prasarana Malaysia Bhd for the project.

"The contract sum includes a contingency or provisional sum of RM400 million, which, if not utilised, will reduce the contract sum," they added.

The salient terms of the LoA include:

*the completion date of Feb 28, 2024, unless extended in accordance with the contract;

* MRCB-George Kent JV to provide a performance bond for the equivalent amount of 5% of the contract sum within 30 days from the date of the LoA; 

* MRCB and George Kent are to provide a proportionate corporate guarantee to Prasarana Malaysia Bhd; and

* MRCB and George Kent said negotiations on the fixed price contract will continue so that the contract will be executed no later than Dec 12, 2018.

They added that the project is expected to contribute positively to the future earnings of both groups.

On Oct 17, the MRCB-George Kent JV had announced that it was notified by the government that the LRT3 project will continue, but at a lower cost of RM16.6 billion – almost half or 47% of the earlier cost of RM31.45 billion in July.

The cost include land acquisition costs, interest during construction and other costs.

The implementation concept of the project will also be remodelled from a project delivery partner regime to a fixed price contract regime.

At 2.37pm, shares in MRCB were up 2.5 sen or 3.29% at 78.5 sen, with 27.11 million shares done, bringing a market capitalisation of RM3.43 billion. George Kent's stock also rose 3 sen or 2.61% at RM1.18, with 2.15 million shares traded, valuing it at RM619.88 million.— theedgemarkets.com

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