Anthony Loke: Wee Ka Siong asked Dhaya Maju-LTAT to subcontract KVDT2 project to China company

KUALA LUMPUR (Nov 17): Former transport minister Anthony Loke said that Transport Minister Datuk Seri Dr Wee Ka Siong (pictured) had asked Syarikat Dhaya Maju-LTAT Sdn Bhd (DM-LTAT) to subcontract the Klang Valley Double Tracking Phase 2 (KVDT2) project to a company from China — instead of carrying it out themselves.

Loke, who was debating in Dewan Rakyat on the bill for Budget 2021, again questioned the government’s motive for cancelling the contract with DM-LTAT as the government would have to fork out RM1 billion in settlements to the company, which already initiated a civil suit against them.

The Seremban Member of Parliament (MP) for DAP then read an excerpt of an affidavit by DM-LTAT chief executive officer (CEO) Datuk Mohamed Razeek Hussain Maricar, which was filed last month in the Kuala Lumpur High Court, in which he alleged that Wee asked him to subcontract the project to a China-based firm.

“I aver that the real reason of the delay and/or refusal of the second defendant (Wee) to execute the revised contract within the stipulated time was due to the fact that the second defendant had the ulterior and improper intention and/or motive to injure the plaintiff (DM-LTAT) by terminating or cancelling the contract between the plaintiff and the first defendant (the government of Malaysia).

“On or about [April 14, 2020], the plaintif had a meeting with the second defendant. In this meeting, the plaintiff was asked to subcontract the whole project to a 'China company'. After the plaintiff declined to do so, the meeting ended,” he claimed.

Loke then said that this is a serious allegation levelled against the current transport minister and he should be taken to task.

“If this allegation was levelled against ministers from DAP or during my tenure as the transport minister, we would be labelled as selling our interests to China and denying a bumiputera contractor,” he added.

Loke said that the government’s unsubstantiated termination of the contract with DM-LTAT would cause 8,512 workers to lose jobs, with adverse effects on 261 local suppliers and subcontractors, most of whom are bumiputera.

DM-LTAT filed a suit against the government in September to stop the Perikatan Nasional (PN) government from terminating the contract. The company claimed that the government had no legitimate basis to terminate the project, which is worth almost RM4.47 billion.

DM-LTAT is an 80:20 joint venture (JV) between privately held construction company Dhaya Maju Infrastructure (Asia) Sdn Bhd (DMIA) and the Armed Forces Fund Board (LTAT).

Former defence minister and Kota Raja MP Mohamad Sabu from Amanah also interjected during the debate to state that LTAT is a statutory body which manages pension funds of certain members of the Malaysian Armed Forces, and that the government is not sensitive to needs of the nation’s veterans.

The KDVT2 rehabilitation job scope includes replacement of the existing 25-year-old tracks besides the electrification system and upgrades and maintenance. The project involves two KTM railway tracks — one from Salak South to Seremban and the other from a point between Kuala Lumpur Sentral and Angkasapuri to Port Klang.

To recap, DM-LTAT was first appointed the contractor for the KVDT2 project by the Barisan Nasional (BN) government in April 2018, shortly before the 14th general election (GE14). The original contract value was RM5.265 billion.

Months later, when Pakatan Harapan (PH) formed the government, the contract was terminated on the grounds that it was overpriced and awarded via direct negotiation.

However, Loke, who was the transport minister then, reawarded the contract back to the JV but at a lower value 10 months later in July 2019. The value of the contract was reduced to RM4.475 billion, 15% lower than the original RM5.26 billion.

A year later, the current government terminated the contract.

Wee said his ministry would reopen the tender for the KVDT2 project after the termination of the contract previously awarded to DM-LTAT.

He claimed that the contract was terminated after taking into consideration the results of an extensive study and investigations which found that the cost of the said project under DM-LTAT was overpriced — despite the PH government having already reduced the cost by 15%.

Wee quoted a study done by Ministry of Transport-assigned consultant Opus (a subsidiary of Khazanah Nasional Bhd), which concluded that the project's actual cost was RM3.4 billion based on DM-LTAT's original scope of work.

However, DM-LTAT claimed that the government had no reason to terminate the contract as it was unaware of the study.

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