MMC-GAMUDA, the developer of the Mass Rapid Transit Line 2 (MRT2), said it has not received official confirmation of the Finance Ministry’s decision to cancel and issue a new tender for the underground portion of the project.
It also offered a RM2.3 billion reduction in cost on the uncompleted portion of the underground tunnelling during negotiations with Putrajaya over the last two months, it said in a statement today.
“The underground works awarded contract price is RM15.47 billion. As progress achieved is now 40%, the balance of the uncompleted underground works is now valued at RM9.6 billion,” it said.
“MMC-Gamuda offered a reduction of RM2.3 billion, which represents 24% of this value.
“It was also achieved by reducing the number of entrances to stations and the number of active stations constructed. From a total number of 10 stations, four will be shelved,” the company said today in a statement.
The firm said the price of the underground works was influenced by requirements that increased the scope of works significantly.
“During the initial tender process, MMC Gamuda submitted an alternative proposal with savings by reducing the prescriptive requirements without compromising the safety, performance and functionality of the operational railway.
“However, MRTCo elected not to accept the alternative offered by MM-Gamuda.”
The cost is also because of the need to tunnel through extreme karstic limestone in the city centre and threading the tunnels through high-end properties.
Gamuda Bhd shares lost 25.86% and opened at RM2.38 today, following Putrajaya’s announcement yesterday that it had terminated the company’s contract to build the underground portion of MRT2.
Finance Minister Lim Guan Eng said yesterday that an international open tender would be called to appoint a contractor for the underground works after the ministry and MMC-Gamuda failed to reach agreement on cost reduction for the underground works.
The company said axing the contract will immediate lead to 20,000 job losses, including a number of Bumiputera workers.
The termination would also expose MMC-Gamuda to compensation suits from terminated employees, sub-contractors, suppliers, manufacturers and others.
THE MALAYSIAN INSIGHT