Fuelling higher transparency ambitions

PETALING JAYA: As all eyes turn towards the opening for Mass Rapid Transit 2’s (MRT2) second phase this Thursday, it is natural for the public to be feeling a sense of anticipation with respect to transport connectivity, especially considering the green light given to MRT3 by the government at the recent Budget 2023.

More importantly for the country, Malaysians would be expectant of further reform in government procurement, especially for large mega infrastructure projects involving public funds such as MRT lines or expressways.

With Prime Minister and finance minister Datuk Seri Anwar Ibrahim having mentioned that the ministry is dedicated to go as far as publishing tender numbers from all bids for public viewing even before the awarding of contracts as well as the subsequent results of the bids, industry observers are of the view that this move would be the way forward in showing the country is taking its corruption image seriously.

As such, with the government having raised public expectation for transparent procurement, it is anticipated that the lowest priced tenderers for each civil works package will be awarded the contracts, if they possess the requisite track record and capabilities.

Going specifically into the MRT3, the project consists of three main packages; namely CMC301 which pertains to depot works, CMC302 which covers the construction of above ground civil works while CMC303 relates to underground works.

Citi Research, in its research note from last month, noted that Malaysian Resources Corp Bhd (MRCB) has put in the lowest bid for CMC301 at RM2.9bil, although TRC Synergy Bhd is tipped to be favoured given its track record, albeit putting in a slightly higher bid at RM3.1bil.

For CMC302, the research house said YTL Construction entered the lowest bid at RM10.8bil, ahead of IJM Corp Bhd’s RM11.8bil, along with MRCB and Sunway Construction Group Bhd.

Similar to the first package, while IJM has a higher priced bid compared to YTL Construction, it also has more experience in MRT construction as it was involved in the development of the first two lines.

To note, YTL Construction’s railway track record is in the interstate railways through the Gemas – Johor Bahru Double Tracking project.

In the meantime, the leading contender for the last package CMC303 is the joint-venture MMC-Gamuda KVMRT Sdn Bhd, with the most economical bid at RM13.3bil, in contention with IJM who is partnering China Railway Engineering Corp (Crec) Sdn Bhd with fractionally higher bid of RM13.8bil.

Crec is a subsidiary of China Railway Group Ltd, a major player in China’s urban rail transit projects.

Analysts are of the consensus that while the bidding could be too close to call for the first two packages, the MMC-Gamuda collaboration would be the favourite to win CMC303, given its experience as the turnkey contractor for the first two MRT lines.

Senior equities analyst at CGS-CIMB Research Sharizan Rosely told StarBiz that MRT project owner MRT Corp Sdn Bhd has not publicly disclosed the preliminary details of the Tier-1 MRT 3 civil works open tenders at this stage.

Sharizan reiterated the view that companies with extensive rail experience in past MRT projects and have undertaken medium to larger value scopes including Gamuda, IJM Corp, Sunway Construction and MRCB would likely feature prominently in the bidding process.

He said these companies may stand out in terms of tender pricing and technical capabilities toward the final stages of the Tier-1 tender evaluations of the CMC301, 302 and 303 packages.

“With the green light given to MRT3 following the retabling of Budget 2023, it is positive for the sector as this would restore mega job contract flows and benefit the domestic rail supply chain

“This is considering that MRT3 is the only sizeable rail initiative to be rolled out post-the pandemic period, and can be deemed as a high-impact and high-multiplier project,” said Sharizan.

Meanwhile, another analyst from a local research house commented that if the MRT3 project were to follow the route of its two predecessors, then the winner’s name and bidding amount would be revealed upon its awarding.

“Obviously, we are in a sense expecting a higher level of transparency given what the Prime Minister has publicly declared, preferably with us being able to view the names and numbers before the final awarding, but ultimately it is still up to the government and MRT Corp,” he said.

Simultaneously, he noted that while the MRT3 has been granted the Prime Minister’s approval, there is still plenty of groundwork to be done

He said this is not just in terms of the bidding process but also on various action plans such as land acquisitions and public display of the railway schemes.

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