At least 40% of ECRL civil works worth RM10b to be awarded to local firms

At least 40% of ECRL civil works worth RM10b to be awarded to local firms
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KUALA LUMPUR (Jan 6): East Coast Rail Link (ECRL) project owner Malaysia Rail Link Sdn Bhd (MRLSB) and main contractor China Communications Construction Co Ltd (CCCC) have reached an agreement for CCCC to appoint local subcontractors and suppliers for at least 40% of the civil works of the ECRL project excluding tunneling works.

In a joint statement today, MRLSB and CCCC said the value of the works is estimated to be up to RM10 billion for the implementation of the project from 2017 to 2026.

CCCC has also agreed to accord special attention to the appointment of small contractors from Grades G1-G3 categories that will directly benefit them as well as the overall construction industry players in the country.

The firms said that to date, a total of 403 local contractors have successfully passed the pre-qualification process and have already been registered in the online registration system.

Of these, 212 companies are bumiputera contractors or 52% of the total pre-qualification.

MRLSB chairman Tan Sri Mohd Zuki Ali said from the implementation of the project from 2017 until Nov 30, 2020, a total of RM3.39 billion worth of ECRL work contracts (including permanent and temporary civil works) had been awarded to almost 2,000 local companies comprising contractors, suppliers and consultants.

"Of the total amount, RM1.69 billion was for works in Pahang, followed by Terengganu (RM1.4 billion) and Kelantan (RM0.3 billion).

"Local companies that have been appointed by CCCC are also eligible to apply for project loan financing from SME Bank through a tripartite MOU (memorandum of understanding) which was inked on Nov 18, 2019 between MRLSB, CCCC and SME Bank.

"Through this initiative, local contractors are also supported by financing options to ensure implementation of works is as per schedule and meets the high standards set by CCCC," he said.

MRLSB and CCCC said to further encourage the participation of local contractors in the ECRL project, the firms have collaborated with the relevant state governments to provide another platform for local contractors to participate in the ECRL project.

MRLSB and CCCC said they have signed a tripartite MOU with several state government-owned companies.

The MOU is aimed at establishing joint ventures between MRLSB, CCCC and also state governments by taking full advantage of the implementation of the ECRL project in the respective states, they said.

Zuki said the participation of local contractors in the construction of this project will act as a stimulus to the local construction sector with as much technology transfer as possible as the ECRL project is expected to be one of the most challenging engineering and construction projects in Malaysia.

"Therefore, our hope is that local contractors can benefit from the transfer of knowledge and technology which will ultimately maximise the impact of government investment in the current challenging economic environment of the country," he said.