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Explain MRT3 model switch from PDP to turnkey, DAP MP tells Putrajaya

The MRT3 project, also called the Klang Valley Circle Line, is a rail line aimed to connect and integrate with the existing MRT1 Sungai Buloh-Kajang rail line and MRT2 Sungai Buloh-Serdang-Putrajaya line. — Picture by Yusof Mat IsaKUALA LUMPUR, Nov 11 ― Opposition lawmaker Tony Pua wants the federal government to explain its decision to switch the MRT3 project delivery structure from a project delivery partner (PDP) model to a turnkey model.

In a statement today, the Petaling Jaya Utara MP questioned if the turnkey model would really help the government save on financing cost, suggesting instead that taxpayers may be made to foot “a whole lot more” in the end.

“The PDP model used in the MRT 1 and 2 projects saw the participation of local companies who were to ensure the on-time delivery the project.

“The government has previously praised the delivery of MRT for being done ahead of schedule and purportedly under budget,” he said.

But Pua noted that the tender winner for MRT3 will be subject to stringent conditions under the turnkey model, including providing at least 90 per cent financing and with repayment done within 30 years.

He claimed that the financing requirements were unprecedented and seemed “intentionally designed to disqualify locally experience major infrastructure builders like Gamuda Bhd or MRCB”. 

“Unlike the MRT 1 and 2 projects that saw the participation of Malaysian at all levels of the project, it now seems much less likely for local firms to participate in MRT3, unless they form consortiums or are hired as subcontractors by the turnkey developer,” the DAP national publicity secretary added.

He also pointed to MRT Corp’s admission that the turnkey financing model is aimed at attracting foreign companies who may provide better financing options for the line.

He also said it was “suspicious” that the MRT3 project completion date has been brought forward to 2025, a mere three years after the scheduled completion of the MRT2 project.

He asked the government to explain the “sudden rush” to award these infrastructure projects and suggested that there may be a hidden motive and unnamed “beneficiaries” involved.

The MRT3 project, also called the Klang Valley Circle Line, is a rail line aimed to connect and integrate with the existing MRT1 Sungai Buloh-Kajang rail line, MRT2 Sungai Buloh-Serdang-Putrajaya line which is currently being built as well as other light rail transits and the monorail systems.

Local research house CIMB Equities Research had in September forecast MRT3 would cost between RM35 billion and RM40 billion.