All eyes on ECRL civil works

Revised deal: Visitors viewing a scale model of the ECRL project. A supplementary agreement to pave the way for the resumption of the project has raised participation of local players from 30% to 40%. — AP

PETALING JAYA: More than 1,000 firms are vying for a share of the 40% civil works portion of the East Coast Rail Link (ECRL) project.

A total of 1,321 local firms have submitted their interest over the course of the pre-qualification exercise held on May 29 and 30, for a share of the civil works portion of the RM44bil mega project.

The exercise was open to all experienced local contractors that had a Construction Industry Development Board (CIDB) grade of G3 to G7 with a minimum two-star score rating.

Malaysia Rail Link Sdn Bhd (MRL) and China Communications Construction Co Ltd (CCCC) said in a joint statement that the participation of G7-rated companies topped the list with 859 submissions or 65%, followed by 132 submissions from G5-rated companies, 132 from G4, as well as 104 and 92 from G3 and G6, respectively.

“The level of enthusiasm shown by Malaysian construction companies, in particular from the G7 CIDB rating companies, augurs well with the increase in civil works participation for local contractors from 30% to 40% of the ECRL project as per the inking of the supplementary agreement between MRL and CCCC on April 12, 2019,” the joint statement read.

Of the 1,321, 75.25% or 994 firms are bumiputra engineering and construction companies.

MRL said it would work closely with CCCC in the evaluation and shortlisting process of the construction companies to be potential tenderers of the civil works packages, whereby successful companies would be notified in writing.

It added that local industry players, especially contractors, are highly encouraged to seize any opportunities to participate in the ECRL project, not just as contractors but also as suppliers, consultants and other relevant scopes.

“It is our hope that local contractors can bring their A-game and are able to demonstrate their capabilities and technical know-how and offer their services competitively,” said MRL chief executive officer Datuk Seri Darwis Abdul Razak.

“We also hope that ECRL will be an exemplary government project that demonstrates the capabilities of our local contractors to work with an international contractor in carrying out and meeting the high standards of a large-scale infrastructure project.”

He added that the participation of local contractors would serve as a catalyst in the knowledge and technology transfer besides acting as a stimulus to the local construction sector.

China Communications Construc-tion (ECRL) Sdn Bhd managing director Bai Yinzhan said it hoped Malaysian contractors would highly benefit from the cooperation that would maximise the commercial impact of the Malaysian government’s investment by increasing their competitiveness in the quality of products and services.

AmInvestment Bank Research said in a report yesterday that it acknowledged the revival of ECRL and Bandar Malaysia projects shall result in more jobs available in the market for local construction players.

However, it said, the market has not priced in enough risk premium to reflect the fact that the latest mega projects are driven by world-class Chinese contractors and Chinese funding, which would probably leave the local contractors with only low-value or low-margin supporting roles.

“Given the still elevated national debt, the government has no choice but to remain steadfastly committed to fiscal prudence, which means the revival of the ECRL project could be a ‘zero-sum game’ as it impedes the government’s ability to implement other public infrastructure projects,” the research house said.

MRL, a wholly-owned subsidiary of Minister of Finance Inc, is the project and asset owner of the ECRL. The 640-km rail network is scheduled for completion by December 2026 and is expected to link Kota Bharu to Putrajaya in about four hours.

In April, it was announced that the ECRL would proceed at a total construction cost of RM44bil, a 34% reduction from the original cost of RM65.5bil.

The revised alignment will cover Kota Baru-Mentakab-Jelebu-Kuala Kelawang-Bangi/Putrajaya-Port Klang, which will remove the tunnel-intensive Gombak-Bentong-Mentakab route.

A supplementary agreement inked between MRL and CCCC to pave the way for the resumption of the project has raised participation of local players from 30% to 40%.

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