June 21, 2011

KUALA LUMPUR, June 21 — A Malaysia-British joint-venture has won the coveted Kelana Jaya light rail transit extension project for RM670 million, operator Syarikat Prasarana Negara Berhad said today.

Prasarana said it issued the Letter of Award to CMC-Colas-Uniway (CCU) to undertake works worth RM673, 920, 651.04.

“The job entails the engineering, procurement, construction, testing and commissioning of system works for the Kelana Jaya Line Extension project,” Prasarana said in a statement.

It said the Kelana Jaya line will be extended from Kelana Jaya Station by another 17km to Putra Heights through 13 new stations.

The LRT extension project was announced in Budget 2009 and undertaken to improve the efficiency of the public transportation in the Klang Valley.

The Singapore Straits Times reported yesterday that a Finance Ministry committee decided on the CCU, led by British firm Colas, after controversially awarding the deal last week to another joint venture.

But the committee’s latest decision ahead of Datuk Seri Najib Razak’s visit to London next month continues to ignore the recommendation of SPNB for the contract to be awarded to a third company in the frame.

Last week, The Malaysian Insider reported that the committee ordered SPNB to award the deal to the Hartasuma Sdn Bhd-Bombardier joint-venture, whose RM890 million bid is nearly 50 per cent higher than the RM610 million quoted by SPNB’s pick, Ingress Corp Bhd-Balfour Beatty Rail Sdn Bhd.

The Singapore Straits Times quoted political analysts and industry executives as saying that the “behind-the-scenes intrigue shows how opaque and non-transparent practices that have long characterised large public-sector contract awards remain the order of the day in Malaysia.”

Calling the LRT deal “a strong test case” for the Najib administration, the Singapore Straits Times said the decision to override SPNB was “likely to dull Kuala Lumpur’s efforts to attract much-needed foreign investment”.

SPNB is spending some RM7 billion for the extension of both Kelana Jaya and Ampang LRT rail networks. The Kelana Jaya network will be extended 17km while the Ampang one will be extended by 17.7km.

The wholly-owned unit of the Finance Ministry was forced to cave in to pressure from Malay rights groups last month when it revised pre-qualification criteria for several construction packages for the Klang Valley Mass Rapid Transit (KVMRT) by allowing joint ventures or consortiums.

It had earlier imposed additional criteria on contractors taking part in the project tender which disallowed them from forming joint ventures or consortiums.

Malay rights group Perkasa, however, accused Prasarana of blocking Bumiputera contractors from participating by enforcing strict guidelines that would only benefit “rich non-Bumis,” adding that project delivery partner MMC-Gamuda was “looting and monopolising” the project.

The KVMRT is expected to be the largest ever construction project in Malaysia and had earlier been estimated to cost between RM36 billion and RM53 billion.