The Land Public Transport Commission (Spad) has defended its decision to award the RM36 billion Klang Valley Mass Rail Transit (MRT) project to MMC-Gamuda JV Sdn Bhd.

The appointment of MMC-Gamuda JV as the project delivery partner (PDP) was due to the experience of the two companies involved, Spad chief executive officer Mohd Nur Kamal said in a statement today.

His statement appears to be an attempt to deflect criticism against the government appointment of MMC-Gamuda JV without an open tender being called. 

The PDP will also function as project manager that will bear the delivery and cost risks, instead of the government.

NONE "The size and complexity of the Klang Valley MRT project carries with it significant risks of delays and cost overruns. To protect the public interest, the government has planned to take the delivery risk (time and cost) out of the project.

"The PDP concept is merely an enhancement of the project manager role, with certain built-in incentives and penalties that are designed to align the interest of PDP with the government during project implementation," Nur ( right ) said.

"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 purely engineering consultancy has no financial capacity or management capability to bear."

Nur also explained that MMC-Gamuda JV has been given the authority to manage all aspects of the project, including packaging of works, calling for tenders, evaluating the bids, recommending the contractors and jointly awarding of contracts and ensuring the performance of each appointed contractor.

"(The PDP) even has the power to step in and take over delivery of contracts that are behind schedule, where necessary, to ensure targets are met," he said.

National interest in tunnelling bid

The government will be scrutinising the entire process through a value management study (VMS) consultant to ensure the project progresses efficiently.

"Ultimately, the government will have the final say," he said.

The VMS consultant has been identified as international management consultancy firm McKinsey & Co. Its services will cost RM8.2 million.

NONE Nur also defended the government's decision to allow MMC-Gamuda to join the bidding for tunnelling works as well, a move that some have claimed is unfair.

"It is important to note that for the tunnelling works, the overall project management, design, evaluation and recommendation of the bids will be done by an independent project manager and the government.

"If the PDP bids, it cannot be part of the evaluation committee. The PDP will have the opportunity to bid as it is the only Malaysian group with the expertise and track record to do so.

"To bar the PDP from bidding would mean that only foreign contractors will be involved, which is not necessarily in our national interest," Nur added.

Minister in the Prime Minister's Department Mohd Nazri Abdul Aziz told Parliament on March 15 that MMC-Gamuda JV would only be allowed to bid for the tunnelling section of the project, despite being appointed the project delivery partner.

azlan