Prasarana Malaysia Bhd assured that the light rail transit line three (LRT 3) project’s construction cost will be limited to RM9 billion amid the falling ringgit, which sparked concerns on higher cost of imported materials, reported The Sun Daily.
“We’re looking to capitalise the usage of the equipment that is available here, so that we can minimise direct imports,” said Prasarana president and CEO Datuk Azmi Abdul Aziz last Friday when announcing the appointment of George Kent (M) Bhd and Malaysian Resources Corp Bhd (MRCB) as the project delivery partner for the LRT 3 project.
Although he acknowledged that the project’s design “will be a bit more challenging” considering the current developments like the weakening ringgit, the cost of the project will not overrun with the appointment of the PDP, he said.
“One of their (PDP) KPIs (key performance indicators) is managing the VOs (variation orders); if they cannot manage it, then we’ll deduct a certain percentage of their fee,” shared Azmi.
Notably, the PDP is entitled to a six percent fee out of the total work package contract value. The PDP will receive the full fee if the total cost of the project is equal or less than the target cost.
But if the project cost exceeds the target cost, then the PDP’s fee will be reduced based on an agreed formula.
Azmi noted that the RM9 billion cost does not include the cost of land acquisition, which will be revealed at a later date pending the confirmation of the land size to be purchased.
He added that prequalification for the construction packages is expected to be called by end-2015 to ensure that the project is completed as scheduled (31 August 2020).
LRT 3’s alignment also will be confirmed within the year, while construction is set to commence early next year, said Azmi.
To connect Bandar Utama to Johan Setia, Klang, the 36km-long line is expected to transport about 70,000 passengers daily.
Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my
