• Disclose the MRT Line 3 tender to the public

    Media Statement by Dr. Ong Kian Ming, Member of Parliament for Serdang, on the 15th of November 2017

    Disclose the MRT Line 3 tender to the public

    I was surprised to read the headline of the Edge Financial Daily yesterday (14th November 2017) with the title “Don’t politicise tender timeline – MRT Corp” quoting the words of the MRT Corp’s CEO Datuk Seri Shahril Mokhtar. I have found Shahril and his staff at MRT Corp to be very professional and responsive to public feedback in my dealings with them, in the context of the MRT Line 2 which runs through my constituency of Serdang. As such, he should have expected great public scrutiny when the construction and financing model for MRT Line 3 – expecting to cost between RM35 to RM40 billion – is changed from a Project Delivery Partner (PDP) model to a turnkey model.

    MRT Corp and the Land Public Transport Authority (SPAD) have been singing praises for the PDP model as far back as 2011.[1] Former SPAD CEO, Mohd Nur Kamal, wrote that “In the case of the PDP, the risk of delays and cost over-runs is now borne by the PDP for a fee. The PDP provides a single point of accountability to deliver the entire project within agreed time and cost targets, or face financial penalties, something a pure engineering consultancy has no financial capacity or management capability to bear.”

    Shahril, in yesterday’s media briefing, also explained that since MRT Corp acted as the PDP for the underground portion of the MRT Line 2, it can also manage the turnkey contractor for MRT Line 2 in a similar fashion. He said, “Since we have the necessary experiences to manage the underground portion, I think the question of not pursuing the PDP model should not have arisen, as we are capable of managing the turnkey contractor like we have done in the past”. But since the turnkey contractor is also responsible for 90% of the financing of the MRT Line 3 project, will the same incentives and punishments as the PDP model be used for MRT Line 1 and Line 2?

    Shahril also stated that the alignment of MRT Line 3 has not been decided and will only be confirmed by the end of 2018. If the alignment is not confirmed, how can the bidders for the turnkey contractor accurately assess the total cost of building the MRT Line 3? For comparison, the MRT2 alignment went on public display in May 2015[2] and the first tender for the project’s advanced works was accepted only in November of that year. The packages for the underground portion and the first viaduct package was only awarded in March 2016, almost a year after the public display of the alignment.[3] Now, not only will tendering companies have to draw up their proposals very quickly, the full specifications of the project including the route alignment will only be known after the tender closes.

    The tender documents for a project as big and complicated as the MRT will usually be sold to potential bidders and not be available for public scrutiny. But given the cost of this project, the changes in the construction and financing terms, and high level of public interest, I call upon the tender specifications of the MRT Line 3 to be publicly disclosed to answer many of the questions which have been raised by journalists, financial analysts and Members of Parliament.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://www.mymrt.com.my/cms/upload_files/mediarelease/mediarelease_download_000005.pdf

    [2] https://www.thestar.com.my/business/business-news/2015/05/14/details-of-mrt2-project-on-public-display-tomorrow/

    [3] http://www.mymrt.com.my/en/awarded-contracts-ssp

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