Gamuda/MMC Corp ... Jun10

The city’s infrastructure, a subject of increasing criticism, is likely to be boosted by a new mass rapid transit (MRT) system that could be put into place soon to complement the role of the monorail and LRT systems.

Sources said the government was in the final stage of considering the MRT project, believed to be planned for within the confines of the city which was experiencing growing traffic congestion.

The names of at least two industry players have been bandied about for the MRT project — Gamuda Bhd and MMC Corporation Bhd.

Sources said the two were being considered to jointly undertake the MRT job, or a section of it, due to their expertise and track record for the design and construction of the multiple awards-winning SMART Tunnel.

Lending credence to the possibility of a new MRT system for KL is that at least one developer in KL city, sources said, had been told to redesign its upcoming billion ringgit mixed-development project to incorporate an MRT station.

Meanwhile, it is not immediately known if the earlier proposed extensions to the LRT lines would unfold as intended.

The KL monorail has been designed to complement and interface with KL’s existing and planned urban transportation systems. The LRT, meanwhile, radiates into the suburbs.

Introducing an MRT would not only alleviate KL’s traffic congestion, rendering the city attractive to work and live in, but also enhances real estate values in areas that will stand to benefit, both directly and indirectly.

Under the 10MP, MRT system, estimated to cost RM36 billion, could be built in KL over 10 years. A JV between Gamuda and MMC Corp is the proponent of the project and it stands a good chance of landing the contract because it has the expertise.

However, various parties said that the project is very much in the preliminary stage and no firm decisions have been made. It is understood that the proposal by Gamuda and MMC was unsolicited, and that the government has decided to put it out to tender in a Swiss Challenge.
Meanwhile, the project will be good for the construction sector. Industry observers are confident that Gamuda-MMC Corp will get the nod for the project, citing the JV’s tunneling experience. The JV was responsible for the construction of SMART.

If the government approves this project, it will very likely go to Gamuda-MMC, which is also did the double tracking project and SMART. If the MRT project comes to fruition, it will be a milestone for Gamuda. It will yield about RM900 million for Gamuda based on forecasts.

Based on 2010 prices, the MRT project will cost about RM36 billion and involve tunneling and the construction of rail lines and stations. Of the amount, 30% is budgeted for tunneling works.

Gamuda-MMC Corp will be bidding for only that portion of the project, even though it had mooted the idea, because of conflict of interest in the portions. It is believed that this is because the JV had proposed the project. In other words, the JV is eyeing only about RM10.8 billion worth of work.

About 70% of the project’s cost will be competitive bidding, in which the JV cannot bid because of conflict of interest. Only foreign contractors will qualify to bid for the remaining 30% which comprises tunneling work, as there is no other Malaysian contractor with tunneling experience. Thus, to have Malaysian participation, the government will enable the JV to bid.