Putrajaya cancels MMC-Gamuda’s contract for MRT2’s underground portion

The entire MRT2 is expected to be fully operational by July 2022.

PETALING JAYA: Putrajaya has terminated MMC-Gamuda’s contract to build the underground portion of the MRT Line 2 (MRT2) after the two parties failed to reach an agreement.

Finance Minister Lim Guan Eng said all unfinished underground work will be re-tendered via an international open tender process.

The decision, Lim explained, was made after the government felt it could achieve “further significant savings” compared to the offer made by MMC-Gamuda through re-tendering the underground work package.

“The Pakatan Harapan government holds steadfastly to obtaining ‘value for money’ on all government expenditure, especially when large borrowings are required to complete any project,” he said in a statement, adding that the billions of ringgit saved would reduce the debt and interest the federal government would need to repay.

Lim said the Cabinet, however, accepted an offer made by MMC-Gamuda to complete the above-ground portion of the MRT2 project as a turnkey contractor at the cost of RM17.42 billion.

The original price tag for the project was RM22.64 billion.

This, Lim said, represented 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.

More savings, he said, would be gained when the underground portion is re-tendered 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.”

The entire MRT2 line is expected to be fully operational by July 2022 and will cater to two million commuters from Sungai Buloh to Serdang and Putrajaya.