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Saturday, March 5, 2011

MRT project cost now estimated to reach RM50b

PETALING JAYA: The construction cost of the entire 150km Mass Rapid Transit (MRT) urban transport project may run up to RM50bil, three sources said, two of whom are directly involved in the project. The third is an independent party doing consulting work for the MRT line.

“When Gamuda-MMC first gave an estimate a couple of years ago, a figure of RM36.6bil was brought up for the 150km line,” said the source who is directly involved with the project.

“Now that we are concentrating on one line Sg Buloh-Kajang we have asked them for an estimate and they said it may cost RM18bil to RM20bil to construct. This does not include the rolling stock, land acquisitions and other provisions.”

Land Public Transport Commission chief executive officer Mohd Nur Ismal Kamal said the Government was doing all it could to drive down the cost.

“With land acquisition and rolling stock, it could come up to RM50bil, but it is too early to say,” he said. “We will know the full picture later as the project is still at the public display stage. This will end in middle of May.”

“From the feedback, we will then consider the alignment and the length of the platforms for the stations, whether it is a four-car train or more,” Mohd Nur added.

He said that once the public display was over, a target cost would be worked and agreed on. Once the tender was over, it may be different from the target cost, he said.

“The MRT is not just a transport project. It will have a catalytic effect,” Mohd Nur said, adding that an independent party would scrutinise the project plans and ensure that optimum value was derived.

The entire project will be fully funded by the Government and a special-purpose vehicle under the Finance Ministry would be set up to advise, manage and raise the funds.

CIMB Research in its report yesterday said that the higher cost for the Sungai Buloh-Kajang line was not a surprise as the earlier number was based on 2009 prices. (Higher construction cost and inflation may contribute to the current cost which is estimated to reach RM20bil for the Sg Buloh-Kajang line.)

“Based on the average RM353m/km for the line, the entire MRT project (150km) could be worth RM53bil compared with the current estimate of RM36bil,” it said, commenting on the outcome of Syarikat Prasarana Negara Bhd's contractors' briefing on Thursday.

The briefing was to provide an overview of the MRT project and the job opportunities available.

The event was packed with more than 100 contractors, according to a Prasarana spokesman when contacted by StarBizWeek.

Prasarana project director Zulkifli Mohammad Yusof and Datuk Azmi Mat Nor, who represented the Project Development Partner (PDP), chaired the event. (MMC-Gamuda JV Sdn Bhd manages the project as the PDP.)

CIMB Research said the briefing focused on the Sg Buloh-Kajang MRT line's project structure, alignment specifications, tender guidelines/timelines and updated cost breakdown.

“The main takeaways from the briefing were the prequalification process that will start this month and the total estimated cost for Sungai Buloh-Kajang MRT line that is RM20bil,” it said.

It said Prasarana would start the ball rolling with the elevated structure package (elevated portion is worth RM10.8bil of the total cost of RM20bil) which would be broken up into several sub-packages and was open to all contractors except the PDP.

“Priority will be given to contractors with financial strength, expertise and track record. Contractors who do not prequalify will still be able to bid for the subcontracting packages,” it said.

It added that this suggested the awards were likely to take place no earlier than May 11, while the July 11 timeline for the start of work was still intact.

Prasarana and the PDP will work together in rolling out the award of the MRT packages and disbursing the funds via progress payments.

“Funding/payment will be drawn down from a special company under the Finance Ministry,” it said.

By The Star

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