By Jahabar Sadiq
Editor
The Malaysian Insider
Sep 14, 2011

KUALA LUMPUR, Sept 14 — Rushed tender deadlines, slow decision-making and an abrupt change of project owners is blighting the Klang Valley Mass Rapid Transit (MRT) project that is already reeling from controversial land acquisitions along the Sungai Buloh-Kajang line, critics say.

The Malaysian Insider understands that the key independent check engineer (ICE) job has finally been issued — eight months after it was first put up for tender in the last week of December 2010 — just before the change of project owners.

It was one of many tenders that had short deadlines, much to the dismay of many engineering companies interested in taking part in the bidding.

“The ICE tender was on the last week of December 2010 when most people are on holiday. If that is not bad enough, it took them eight months to finally send out the official award letter,” an industry source told The Malaysian Insider.

“And what is strange is the award was given out so late by Syarikat Prasarana Negara Bhd (Prasarana) but just days before the project was transferred to MRT Co as the new owners,” he added, referring to the switch in project owners by Putrajaya.

Putrajaya had announced last month that MRT Co would take over as project owners effective September 1, with former managing director of Sime Darby Plantation, Datuk Azhar Abdul Hamid, as the chief executive officer.

“They might as well have waited for MRT Co to relook and sign the contracts as they are the new project owners,” the industry source said.

The Malaysian Insider reported on April 14 that the Prasarana board was to meet on that day to award the contract for two per cent of the undetermined project cost, which is reportedly above market rates.

The report said the consortium of HSSI, Hong Kong’s MTR Corp Ltd and Canadian SNC-Lavalin was likely to land the contract despite being rejected by SPNB earlier for not putting a price to its brief — which usually costs up to 0.8 per cent of the total project.

It was understood that the matter was taken off the agenda at the last minute. Prasarana later admitted that HSSI and SNC-Lavalin were already working on the project since February while waiting for the formal award letter.

It is now learnt that the contract price has been revised from RM700 million to RM200 million. The engineering consortium is also seeing a reduced role for SNC-Lavalin while MTR Corp Ltd has pulled out. A key component of the tender requirements is a partnership with an MRT operator.

Officials familiar with the MRT project said that Putrajaya’s Performance and Management Delivery Unit (Pemandu) was concerned about the procurement aspects of the MRT and wanted a direct hand in the process. Prasarana has already had run-ins with its ultimate shareholder, Ministry of Finance (MoF), over a Light Rail Transit (LRT) extension project contract.

It is learnt that differences of opinion and changes in contract awards had led to Prasarana non-executive chairman Tan Sri Izzudin Dali leaving the post last August 31 after just one term. The former Treasury secretary-general is known for his no-nonsense approach and diligent attitude, which led to some clashes over contract awards.

Izzudin’s replacement is former Public Service Department director-general Tan Sri Ismail Adam.

Critics have also pointed out that another tender for the supply and delivery of segmental box girders that support the overhead train line also has a short period of just one month between August 23 and September 20, 2011, which included the Hari Raya Aidilfitri holiday break.

“This is a specialised job that involves very few pre-cast concrete product makers yet it is an open tender rather than a restricted tender. And the period for such tenders is usually six to eight weeks, not three weeks minus the one week Hari Raya break,” an industry official told The Malaysian Insider.

“Why the speed? And why not just invite the few that can actually do the job?” he asked, requesting not to be named by The Malaysian Insider.

He also hoped that MRT Co as the new project owners can clarify the status of contracts and tenders issued by Prasarana, pointing out that Prasarana is the owner and operator of all the other public transport assets such as the LRT, monorail and bus lines.

“There seems to be some duplication here and just more bureaucracy. I hope they get their act together,” the officials said.

Twenty eight firms have already pre-qualified for 16 packages in the elevated part of the 51km-long MRT, which is the country’s biggest infrastructure project and also the largest National Key Economic Area (NKEA) project under Prime Minister Datuk Seri Najib Razak’s New Economic Model (NEM).

The cost for the project was earlier reported to be between RM36 billion and RM50 billion although authorities say those estimates are now outdated and no figure can be finalised before the alignment is confirmed in June.

The massive project is expected to generate 130,000 jobs during its five-year construction phase.

The government aims to have more than half of the population in Greater Kuala Lumpur use the public transport system to prevent traffic congestion.