PRASARANA Malaysia Bhd will start dishing out major work packages of the RM9bil light rail transit line three (LRT 3), most probably from the beginning of the second half of next year, following the appointment of the project delivery partner (PDP) for the development.
Group managing director Datuk Seri Shahril Mokhtar tells StarBizWeek that the floating tender document for the PDP had closed on Dec 8, and so far, about 18 companies are interested to be the ‘project manager’ of the urban line linking Bandar Utama to Johan Setia in Klang.
He explains that Prasarana will have two evaluation stages before deciding the best bidder to undertake the responsibilty of managing the project.
“We will shortlist a few companies from this first evaluation and we will call them back for a more thorough checking process before appointing the PDP. We are targeting to appoint the PDP before the middle of next year,” he said.
Prasarana, which is currently busy completing its RM7bil LRT extension programme (LEP) for its existing Kelana Jaya and Ampang Lines, has decided to emulate the PDP concept, which was first used in the Sungai Buloh-Kajang mass rapid transit (MRT) line under MRT Corp Sdn 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.
However, it is still unclear how Prasarana will pay its PDP for the LRT 3.
“The beauty of the PDP concept lies in the sharing of responsibilities of the project, where it can step in and finish the job if there’s any problem arising,” says Shahril.
Until the appointment of its PDP, which will work with Prasarana in preparing the tender documents, construction packages and design work for LRT 3, Prasarana, in the meantime, will do the public display to obtain public feedback for the railway scheme.
“We have just presented the railway scheme to the Land Public Transport Commission (SPAD) and we are quite positive about it.
“The LRT 3 from Bandar Utama to Klang will span about 36km in length with 25 stations plus an underground station. It is understood that LRT 3 is crucial to serve the capital of the most industrialised state in the country, Shah Alam.”
It has been reported that from Bandar Utama, the line will go on to Tropicana before cutting across Hicom-Glenmarie Industrial Park, heading for Shah Alam via Section 13 near the Shah Alam Stadium, Universiti Teknologi Mara in Section 2 and i-City in Section 7. The line will then travel down to Bukit Raja to the Klang KTM Komuter station before heading further south for Bukit Tinggi and Johan Setia.
It is expected that LRT 3 will be operational in 2020, while the LEP for the Kelana Jaya Line will be completed by October 2016.
Meanwhile, the Ampang Line LEP Phase 1 will be completed in June 2016 and the second phase is expected to be in service by October 2016.
Both LEPs are now at a 65% completion rate.
Listing in the pipeline
Going forward, Prasarana, which is under pressure due to the interest payment of about RM400mil per year for its more than RM10bil worth of bonds and sukuk it has issued in the past decade or so, will be looking at the possible listing of its rail subsidiary post-2018 when it operates the MRT line.
“Post-2018, once we operate the MRT and with the LEP completed, I assume ridership will be good and revenue, better.
“By then, we would be in a better position to assess whether we are prepared to list or not,” he said.
The bonds, sukuk, debts and interest payment will be held at the holding-company level, while the rail subsidiary is expected to only focus on increasing ridership and looking at other avenues to maximise profits.
Early last year, Prasarana had embarked on a corporate restructuring initiative which included the creation of four new entities - Rapid Rail Sdn Bhd, Rapid Bus Sdn Bhd, Prasarana Integrated Management and Engineering Services Sdn Bhd (Prime) and Prasarana Integrated Development Sdn Bhd (Pride).
The move is part of Prasarana’s five-year plan as underlined in its Go Forward Plan 2.0 (GFP 2.0) blueprint.
These entities will now operate the rail, bus, public transport consultancy services as well as property and commercial development for the group with their own separate accounts.
Such listings of successful urban rail transportation companies in the region can be seen in SMRT in Singapore and MTR in Hong Kong.
Besides its fare-based revenue, Prasarana in the past year had also made its foray into property development, where it is focusing on transit-oriented development alongside its multiple rail lines to unlock the value of its land and maximise its income stream. It has done this via tie-ups with various major property developers.
To date, Prasarana has signed four agreements with various developers. Prasarana is jointly developing the RM1.04bil Dang Wangi tower with Crest Builder Bhd and Detik Utuh Sdn Bhd. It has another development in Ara Damansara, where it has awarded the contract to Trans Resources Corp Sdn Bhd (TRC) to develop the Ara Damansara LRT station into a mixed commercial project with a gross development value (GDV) of RM687.6mil.
Prasarana has also inked a joint venture with Naza TTDI Sdn Bhd to build a 26-storey condominium tower in Taman Tun Dr Ismail with a GDV of RM153mil.
The latest of its development in Brickfields, with a GDV of RM1.3bil, is awarded to Bina Puri Holdings Bhd.
When all these developments are completed in about five years’ time, they are slated to drive its non-fare revenue to 30%.
While most of these developments are in various stages of approval towards groundbreaking, Shahril expects one of them to start construction in the first half of next year.