2nd phase of railway project back on track at reduced cost

Transport Minister Loke Siew Fook.

KUALA LUMPUR: Putrajaya will resume the second phase of the project to rehabilitate the double-track railway lines around the Klang Valley at a lower price of RM4.475 billion.

Transport Minister Loke Siew Fook said the cost was 15% or RM789,750,000 lower than the initial project cost, without the reduction of critical scopes such as flood mitigation.

The Klang Valley Double Track (KVDT2) spans 110km, involving two KTM Bhd railway tracks – one from Salak South to Seremban and the other from a point between Kuala Lumpur Sentral and Angkasapuri to Port Klang.

The project will be continued by Syarikat Dhaya Maju LTAT Sdn Bhd.

“The project will be carried out within a span of seven years, with Dhaya Maju as the contractor,” Loke told reporters at the Parliament lobby today.

He said a settlement agreement would be signed to ensure that the company does not claim any costs arising from the cancellation notice dated Oct 19, 2018.

It was reported that the contract for the second phase of the KVDT was awarded by the previous administration to DMIA Engineering in partnership with LTAT in April last year. The contract was terminated after the change of government last year.

DMIA and LTAT then submitted a new proposal to the government in a bid to win back the KVDT2 contract.

Last year, Loke said the ministry would conduct an open tender for the project.

He said the original price tag was “too high”, as there were no new buildings or stations involved.

While no payment has been made to the contractor since the award last year, Loke said about 3% of the works at KVDT2 has been carried out.

The entire project involves infrastructure and system upgrades to ensure safe, reliable and comfortable train services.

The first phase of the rehabilitation project covers the upgrading of systems work between Rawang and Seremban, and from Sentul to Port Klang, involving about 150km at a cost of RM1.3 billion awarded to DMIA. It was awarded in 2016.

It was reported that the project had reached a 75% completion rate in April. The project is supposed to be completed by the end of this year.

Loke said the government had considered several factors in coming to the decision, including legal implications if the project was cancelled.

“That is why after sending a letter of cancellation to LTAT, they came back to the government. They appealed to the government and renegotiated with the government.

“We have taken the spirit that renegotiations succeeded in other projects such as the ECRL, so if we can renegotiate the ECRL, we can renegotiate with this company as well. It is a local company anyway,” he said.

On mechanisms to ensure that they deliver, Loke said safeguards would be put in place, such as the appointment of our own consultants to ensure the project is carried out according to schedule, the terms and conditions and the specifications under the contract.

“There will be better monitoring in place and we will ensure that we appoint a competent independent checker,” he said.

On the seven-year duration, Loke said it was decided by the economic affairs ministry to ensure it does not stress the government financially.

“So even if it’s a big project, RM4.4 billion, the payment is stretched over seven years,” he said.

Financing of the project will come from the annual development expenditure, Loke added.