Unpaid LRT3 contractors to receive payment by month-end

PETALING JAYA (Jan 18): Outstanding payments to the LRT3 (light rail transit 3) contractors, accumulated since February last year, will be settled by the end of this month, said the project’s main contractor, MRCB-George Kent Sdn Bhd (MRCBGK).

MRCBGK held a discussion with the project owner of LRT3, Prasarana Malaysia Bhd, this month and was subsequently informed by the government agency that the work package contractors (WPCs) would be getting paid this month, LRT3 project director Patrick Hwang Chee Leong was reported telling The Star.

It was earlier reported that the certified arrears amounting to RM800 million up to Sept 2018 were driving some of its project sub-contractors to bankruptcy.

If uncertified claims up to December 2018 are taken into account, the cumulative amount owing is said to be about RM1.1 billion, cited sources. However, it has not been confirmed if Prasarana would make good the payment for the three-month period of October to December.

Other than MRCBGK as the main contractor, other listed companies involved in the LRT3 project include Mudajaya Group Bhd, WCT Holdings Bhd, IJM Corp Bhd and Sunway Construction Group Bhd.

Meanwhile, the new agreement between Prasarana and MRCBGK for the LRT3 project is expected to be sealed before Chinese New Year.

The new contract entails a restructuring from the project-delivery-partner (PDP) model to a “fixed-price contract”. Scheduled to be signed by Dec 12, it has been postponed because many employees were not around during the December festive season, explained Hwang.

Spanning 37km from Bandar Utama to Klang, the LRT3 construction was delayed in October last year pending the signing of a new contract mooted by the Pakatan Harapan government.

In July last year, the new government eventually approved the continuation of the track at a 47% cost reduction to RM16.63 billion, along with replacing the PDP model with the turnkey model. The completion date was also extended from 2020 to 2024.

Industry players reckon it would take another two to three months before work resumes.

“Once a new contract is inked, the sub-contractors will then go to the banks for financing. For now, the credit lines have stopped,” cited an industry source.

Prasarana was quoted saying it was unable to give updates at this point.

“We will, however, share with you details on the LRT3 project at the end of the month,” said a spokesperson for Prasarana.