23% saved on MRT2 above-ground works, underground part to be retendered says Guan Eng

Lim Guan Eng. -Starpic

PETALING JAYA: The cost of the above-ground portion of the Mass Rapid Transit 2 (MRT2) project has been lowered to RM17.42 bil, from RM22.64bil earlier, Finance Minister Lim Guan Eng said.

“This is a RM5.22 billion or 23% savings achieved through a reduction in cost and rationalisation in work scope without cancelling any of the above-ground stations,” he said in a statement on Sunday (Oct 7).

He said the Cabinet on Oct 3, 2018, accepted an offer made by MMC-Gamuda through their letters dated Aug 15 and Sept 7 to complete the above-ground portion of the MRT2 project as a turnkey contractor at the cost of RM17.42 bil.

Unfortunately, Lim said both the Federal Government and MMC-Gamuda have failed to reach an agreement relating to the underground portion of the construction project.

“As a result, the Cabinet has decided to terminate the underground contract.

"All unfinished underground work will be retendered out through an international open tender process,” he said.

He added that this decision was made after considering the Federal Government can achieve further savings by retendering the underground work package compared to the offer made by the existing contractor.

“There is already a RM5.22bill or 23% savings made from the above-ground portion of the MRT2 project. More savings will be gained when the underground portion is retendered soon.

“Furthermore, the expected cost reduction for the MRT2 project will cut the fares future rail passengers will have to pay and boost public transport usage in the Klang Valley,” Lim said.

The decision came after a cost rationalisation exercise on the project conducted by the Finance Ministry, with cooperation from the Attorney-General’s Chambers, Transport Ministry and agencies such as Mass Rapid Transit Corporation Sdn Bhd (MRTCo) and the private sector since May 2018.

An engineering consultancy firm was also engaged to conduct the cost rationalisation.

The first phase of the MRT2 project, also known as the Sungai Buloh-Serdang-Putrajaya (SSP) line, which runs from Kwasa Damansara to Kampung Baru, Kuala Lumpur, is expected to be completed by July 2021.

The second phase, which goes all the way to Putrajaya, is scheduled for a July 2022 completion.