Nine LRT3 contractors assured of RM255m remainder payment after signing of novation agreement, says Guan Eng

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KUALA LUMPUR (Feb 22): Work package contractors (WPCs) of the Light Rail Transit 3 (LRT3), who had earlier complained about not being paid by Prasarana Malaysia Bhd, can now expect to receive the RM255 million remainder following the novation agreement signed by Prasarana, MRCB-George Kent Sdn Bhd and the WPCs today.

The nine infrastructure WPCs that signed the agreement today were Mudajaya Corp Sdn Bhd, WCT Construction Sdn Bhd, Gabungan Strategik Sdn Bhd, APEX Communications Sdn Bhd, Rahimkon Sdn Bhd, Sunway Construction Sdn Bhd, Pembinaan Jaya Zira Sdn Bhd, SN Akmida and Trans Resources Corp Sdn Bhd.

"I would like to clarify that Prasarana only has to pay RM760 million and not RM808 million as previously reported in the media last month," said Finance Minister Lim Guan Eng at the signing of the agreement. Work amounting to RM48.6 million had been rationalised, he added.

"From that RM760 million, Prasarana has already paid MRCB-George Kent RM504 million. The remaining RM255 million will be paid to the WPCs after (today's) signing based on the terms that have been agreed on," Lim said.

Meanwhile, Prasarana president and group chief executive officer Datuk Mohamed Hazlan Mohamed Hussain explained that payments had been made following the signing of the fixed-price contract for LRT3.

Lim said RM381 million had been paid before the signing of the fixed contract agreement and RM123 million after it.

The cost of the project will be reduced by RM15.02 billion or 47% to RM16.6 billion under the fixed price contract signed between the Finance Ministry and MRCB George Kent last month.

Separately, the Finance Minister has also planned to increase capacity of the LRT3 from the current 6,210 passengers per hour per day (pphpd) by its completion in 2024 to 9,316 pphpd in 2033.

Subsequently, the capacity will be doubled to 18,630 pphpd in 2040.

"Based on the current plan, the LRT3 capacity will be increased in stages, following demand in the near future instead of 30 years down the road," Lim said.

"Under the previous scope of the LRT3, it would have a capacity of 21,290 pphpd even though that capacity would only be required by 2050," he added.

The LRT3, which will connect Bandar Utama to Johan Setia in Klang, is targeted for completion on Feb 28, 2024.

“As a public transportation system, I believe ticket prices should be at an affordable rate. There’s no use to have a nice transportation system, if it is empty and not utilised by the public due to extremely high fares caused by uncontrolled construction cost. You must remember when cost reduces, fares will also be cheaper. There is a strong link between the two," Lim said.