This article first appeared in The Edge Financial Daily on November 7, 2018
KUALA LUMPUR: MRCB George Kent Sdn Bhd, a joint-venture (JV) company between Malaysian Resources Corp Bhd (MRCB) and George Kent (Malaysia) Bhd, has bagged an RM11.86 billion contract to build the light rail transit Line 3 (LRT3) project from Bandar Utama in Petaling Jaya to Johan Setia, Klang.
“The contract sum includes a contingency or provisional sum of RM400 million which, if not utilised, will reduce the contract sum,” MRCB and George Kent said in separate filings with Bursa Malaysia on Monday.
It is understood that the RM11.86 billon figure is consistent with the RM16.6 billion announced in October, as the latest number is purely for civil works and excludes land acquisition, interest during construction and others, amounting to RM4.8 billion.
On Oct 17, the MRCB-George Kent JV announced that it was notified by the government that the LRT3 project will continue, but at a lower cost of RM16.6 billion — almost half or 47% of the earlier cost of RM31.45 billion in July. The implementation concept of the project was also remodelled from a project delivery partner to a fixed price contract regime.
In Monday’s filings, MRCB and George Kent said the MRCB-George Kent JV had received a letter of appointment (LoA) from Prasarana Malaysia Bhd for the project. The salient terms of the LoA include:
They added that the project is expected to contribute positively to both groups’ future earnings.