KUALA LUMPUR (Nov 5): 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 (LRT 3) project from Bandar Utama in Petaling Jaya to Johan Setia in 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 today.
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 had 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 regime to a fixed price contract regime.
In today's filings, MRCB and George Kent said the MRCB-George Kent JV has today received a letter of appointment (LoA) from Prasarana Malaysia Bhd for the project.
The salient terms of the LoA include:
- the completion date of Feb 28, 2024, unless extended in accordance with the contract;
- MRCB-George Kent JV to provide a performance bond for the equivalent amount of 5% of the contract sum within 30 days from the date of the LoA;
- MRCB and George Kent are to provide a proportionate corporate guarantee to Prasarana Malaysia Bhd; and
- MRCB and George Kent said negotiations on the fixed price contract will continue so that the contract will be executed no later than Dec 12, 2018.
They added that the project is expected to contribute positively to the future earnings of both groups.
At 2.37pm, shares in MRCB were up 2.5 sen or 3.29% at 78.5 sen, with 27.11 million shares done, bringing a market capitalisation of RM3.43 billion. George Kent's stock also rose 3 sen or 2.61% at RM1.18, with 2.15 million shares traded, valuing it at RM619.88 million.