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Friday, October 8, 2010

IJM and UEM may jointly bid for MRT project

PETALING JAYA: Speculation is rife that IJM Corp Bhd and UEM Group Bhd may jointly submit to the Government a proposal for the mass rapid transit (MRT) system.

Currently, it is understood that the only MRT proposal that has been submitted to the Government is the RM36bil proposal by Gamuda Bhd and MMC Corp Bhd.

RHB Research Institute said there were strong rumours in the market that IJM and UEM, via a joint-venture (JV), had submitted or would submit an alternative MRT proposal carrying a much cheaper price tag to the Government, competing head-on with the Gamuda-MMC JV.

The research house’s checks with IJM yielded this response: “It is always difficult to comment on rumours.”

Meanwhile, UEM, when asked by StarBiz on the matter, replied:

“We do not comment on rumours and speculation though as mentioned in July, we would be interested to submit a bid if the MRT project is open for tender.” RHB Research said while theoretically open bidding should ensure the best value for money, it suspected that “urgency” might take precedence in the case of this MRT project.

“We equate the MRT project to the backbone of the Greater KL National Key Economic Area (NKEA) under the Economic Transformation Programme (ETP).

“Thus, we are unsure if the Government can afford to spend a few extra months to evaluate an alternative proposal,” it said in a report yesterday.

Nevertheless, RHB Research believed that most, if not all, related players would benefit from the MRT project given the sheer size of the project, as long as it got off the ground.

“In any case, the Gamuda-MMC JV already said that it only intends to keep the tunneling works that make up about 30% of total project value with the remaining 70% to be awarded out to other players on a competitive basis,” it said.

By The Star

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