Bombardier commits to RM700m local content use in fulfilling Kelana Jaya LRT contracts

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This report is a clarification to an erroneous article titled "Govt inks RM2.17b contracts with Bombardier consortium to refurbish, supply new trains for Kelana Jaya LRT line", which has been removed.

KUALA LUMPUR (April 23): Bombardier Hartasuma Consortium, the train set supplier for Prasarana Malaysia Bhd's Kelana Jaya Line Light Rail Transit (LRT) has committed to maximise the use of local content to up to 35% in its delivery of 27 new train sets for the project.

This means an estimated local content worth RM600 million, based on the RM1.7 billion value of the contract the consortium entered into with the Malaysian government in 2017 for the train sets.

Finance Minister Lim Guan Eng told a media conference today that the first delivery of the new train set will happen in the first quarter next year, and the remaining will be delivered across the next five years.

The consortium has also agreed to extend the existing local supplier base in rolling stock by using components and services offered by 14 local companies, valued at RM100.7 million, in undertaking another RM473 million refurbishment job on the Kelana Jaya LRT's existing two-car train sets.

"These 14 local companies will be providing components and services at a competitive pricing, which will enable them to sustain and boost their business in the rail industry," Lim said.

This means Bombardier has committed to use an estimated RM700.7 million worth of local content in delivering these contracts.

These commitments come under the government's Industrial Collaboration Programme (ICP), a policy that applies to all government procurement activities related to supplies, services and works which exceed certain thresholds; namely above RM50 million for procurement contracts awarded to foreign companies, and above RM100 million for contracts awarded to local ones.

Once triggered, the ICP policy requires procurement vendors to make commitment in the forms of technology transfer, industrial training, global market access, development of local supply chain, the usage of local content and etcetera.

Lim said priority is given to activities that contribute to the national aspiration towards achieving the status of developed country.

"This approach is a catalyst for local industry players to be part of Bombardier's global strategic cooperation and contribute to the Malaysian economic and industrial growth. Furthermore, hundreds of local job opportunities will be created over the next four years through this ICP implementation," Lim added.