Business News

Friday, 27 March 2015

Naza proposes to finance up to 90% of LRT 3

PETALING JAYA: The Naza Group, which is jointly bidding for the role of project delivery partner (PDP) for the development of the RM9bil light rail transit line three (LRT 3) with China-based CSR Zhuzhou Electric Locomotive Co Ltd, has proposed to finance up to 90% of the project.

“The bid by Naza-CSR for the LRT3 project will not just be confined to the role of PDP but will also provide funding of up to 90% of the project cost,” said a source.

The tender by Naza was submitted via unit Naza Engineering & Construction Sdn Bhd (Naza EC), after the inking of a long-term partnership with CSR, China’s largest electric locomotive manufacturer.

The source also said Naza had proposed to jointly implement and carry out the development and construction of other potential rail projects in Malaysia, such as the High-Speed Rail project linking Kuala Lumpur and Singapore.

The company is competing for the coveted role of PDP with five other parties – a joint venture between Gamuda Bhd and MMC Corp Bhd, a tie-up between Malaysian Resources Corp and George Kent (M) Bhd, UEM Group Bhd, Sunway Bhd and a collaborative effort involving WCT Bhd and AlloyMtd Group (which is the merged entity of MTD Capital Bhd and Alloy Consolidated Sdn Bhd).

The six parties were shortlisted for the PDP role by Prasarana Malaysia Bhd.

The PDP concept was first used in the Sungai Buloh-Kajang mass rapid transit (MRT) line under MRT Corp Sdn Bhd. It was proposed by Gamuda which was eventually given the job together with its partner MMC Corp Bhd.

Under the MRT agreement, the PDP will receive a fee of 6% of the total aggregate work package contract value. Should the eventual total cost of the project be less than or equal to the target cost, then the PDP shall be entitled to the full fee. But if the project cost is more than the target cost, then the PDP fee shall be reduced in accordance with an agreed formula.

Subsequently, the joint venture of Gamuda-MMC was also given the PDP role for the MRT2 project.

The 36km-long LRT 3 line, which will link Bandar Utama to Klang, has 25 stations plus an underground station. LRT 3 is expected to be operational in 2020.

Tags / Keywords: Naza , LRT3 , tender , bid

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