The RM50m contract for Metronic Global is more than 125% of its latest annual published consolidated revenue.
KUALA LUMPUR: The Cabinet has set up a committee comprising four ministers to revisit the underground contract that was awarded to MMC-Gamuda for the Mass Rapid Transit 2 project.
According to a source, the four members of the committee are Minister of Finance Lim Guan Eng, Minister of Works Baru Bian, Minister of Transport Anthony Loke and Minister of Economic Affairs Azmin Ali.
This comes following a pledge by the contractor to adopt an "open book approach" if fresh negotiations are held.
"MMC Gamuda remains committed to further discussion with MOF and to cooperate with MOF in reaching an agreeable reduction of cost," it said in a statement issued late Wednesday.
Earlier on Wednesday, member of Parliament and MoF political secretary Tony Pua had written a scathing letter to MMC-Gamuda, suggesting that the contractor had waged a campaign to overturn the MoF's decision to cancel its contract for the underground works.
A source told StarBiz that as new negotiations take place, MMC-Gamuda will most likely agree to costs being reduced further, but it will not come down to the level the MoF is looking at.
According to Pua, prior to the MoF's decision to terminate the contract, MMC-Gamuda had agreed to a cost reduction of RM2.13bil to the contract value of RM16.71bil.
This fell short of the MoF's expectation of RM4.19bil to RM5.79bil in cost savings for the remaining 60% of works yet to be completed, as advised in a study done by an independent consulting engineer.
Shares in Gamuda rebounded on Thursday on hopes that the impasse may be resolved. At 11.30am, the counter was up 19 sen or 9.2% to RM2.26 per share on 59.5 million units done.
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