Delay to cost MRT project 10% more every year

KUALA LUMPUR: The Klang Valley Mass Rapid Transit (KVMRT) project is likely to be implemented sooner rather than later as costs will increase by 10% for every year it is delayed, MMC-Gamuda Joint Venture Sdn Bhd director Datuk Ng Kee Leen said.

"We believe the government would want to roll out the project as soon as possible [to mitigate against further cost increase]," Ng said.

MMC-Gamuda JV, the contractor for the Ipoh-Padang Besar electrified double tracking project, is the appointed Project Delivery Partner (PDP) for the KVMRT which involves the 51km construction of a mass rapid transit (MRT) line connecting Sungai Buloh to Kajang. The whole project, which consists of three lines, is estimated to cost around RM43 billion. This is the largest infrastructure development project ever undertaken in Malaysia.

Ng declined to give details on the tender for tunnelling works of the KVMRT project. "We will expect more news to be announced this Friday, July 8 during the groundbreaking ceremony," Ng told reporters on Tuesday.

Prime Minister Datuk Seri Najib Razak is slated to grace the groundbreaking ceremony of the Sungai Buloh-Kajang line on Friday.

The Sungai Buloh-Kajang line is estimated to be worth RM20 billion and the Gamuda-MMC JV is seen as the forerunner of the tunnel portion, analysts said. Tenders for the tunnel portion are expected to be called in 4Q11 with the job expected to be awarded early next year, OSK Research wrote in a recent note.

"We believe that the (Gamuda-MMC) JV will emerge as the winner. For the remaining two MRT lines, we gather that the independent consultants have submitted the proposed alignment to the government for approval. The other two lines should be implemented after a one-year lag to the Sungai Buloh-Kajang line," the research house said.

For the elevated portion of the line, about 70 contractors have been pre-qualified for the RM12 billion job and tenders are expected to be called in the next two months, OSK added in the note.

Ng said the MMC-Gamuda JV has set up a Construction Training Centre (CTC) to train workers for KVMRT construction works and will open a tunnel training school soon.

"MMC-Gamuda JV will invest a total of RM10 million in the CTC. The CTC graduates will replace foreign workers for construction jobs which will improve efficiency rate and quality of work. We saw 23 graduates from the first batch (on Tuesday) and expect more," Ng said at the CTC graduation ceremony on Tuesday.

Ng said 4,000 training opportunities would be created from the investment in the CTC, while the KVMRT project itself is expected to create 130,000 jobs through 2016.

Ng is also bullish on the construction industry's propects ahead, noting that industry turnover is expected to rise to RM100 billion over the next couple of years once projects under the Economic Transformation Programme (ETP) go full steam. "The current industry average turnover is around RM70 billion, with RM90 billion achieved in 2007. We are definitely bullish on the industry turnover ahead," he said.