KVDT2 project lobbying intensifies

The role of main contractor for the RM5.265 billion Klang Valley Double Track Phase 2 (KVDT2) project has seen lobbying intensify as the government prepares to retender the job.

The Edge reports that three independent railway contractors are urging that the infrastructure project be divided into 10 smaller work packages, of about 20km each.

The 211km KVDT2 involves the rehabilitation of two Keretapi Tanah Melayu Bhd (KTMB) railway tracks, from Salak South to Seremban, and from Kuala Lumpur Sentral and Angkasapuri to Port Klang.

A number of large construction players have expressed interest, including Sunway Construction Group Bhd and IJM Construction Sdn Bhd, while the company that had initially been awarded the contract (by the previous government, through direct negotiation) in a joint venture with Lembaga Tabung Angkatan Tentera (LTAT) - Dhaya Maju Infrastructure (Asia) Sdn Bhd (DMIA) is still hopeful the contract will be awarded to it.

The KVDT2 project had been awarded to the joint venture - Dhaya Maju LTAT Sdn Bhd for RM5.265 billion, and has since been cancelled by the current government for its "excessively high cost".

"After stringent procedures from a value management committee, which included the Economic Planning Unit, the transport and finance ministries, the Land Public Transport Commission, KTMB, Railway Assets Corp and the Public Works Department, DMIA received the contract in 2015. However, because of budgetary constraints of the previous government in 2015, the contract was split into two phases to facilitate payment issues.

"Negotiations for Phase 2 of the project (referred to as KVDT2) started in 2016 and the LOI (letter of intent) was issued in May 2017. DMIA received the award for Phase 2 in 2018," it explains.

Rehabilitation works for Phase 1 of the KVDT project (referred to as KVDT1) is 75% completed, with full completion slated for end-2020.

KVDT1 is smaller in scale, and was awarded at a cost of RM1.41 billion, and encompassed rehabilitation of 42km of KTMB tracks on the Rawan-Salak South and Sentul-Simpang Batu lines, as well as upgrading of 16 KTMB stations in the Klang Valley including signalling, communications, electrification, and station facilities.

"DMIA is proud to be the only company in the country with experience in track rehabilitation under live electrified lines. DMIA is also the owner of the biggest fleet of specialised track machinery worth RM280 million in Malaysia, including an automatic track panel laying machine, which is one of only nine in the world. This was introduced in the Asean region for the first time by DMIA," it says.

However, Mohd Aizuddin Ariffin, who leads the group of three independent railways contractors, says that the project could be undertaken at a lower cost and shorter time frame. The group also urges the government to retender on an open-tender basis.

In a paper dated Nov 1, 2018 by railway consultants Amit Sen Gupta and Dr C T Toh, estimated that the full scope of the works proposed by KTMB should cost RM3.11 billion. And they also proposed a reduced-to-necessity scope which they estimate to cost RM1.89 billion. 

The publication cites a source close to the matter, who says that the estimated cost of the KVDT was based on the 2007 price benchmark of the Ipoh-Padang Besar electrified railway double-tracking project.

"At today's prices, the cost should easily be closer to RM10 billion," said the source.