Govt offers Gamuda's 60%-owned SRS Consortium works on first segment of Penang LRT

Govt offers Gamuda’s 60%-owned SRS Consortium works on first segment of Penang LRT

29 Mar 2024 | The Edge

SRS Consortium is being offered the contracts on the so-called single sourcing request-for-proposal mechanism, Transport Minister Anthony Loke Siew Fook said in a statement.

SRS Consortium is being offered contracts on the so-called single sourcing request-for-proposal mechanism, Transport Minister Anthony Loke Siew Fook said in a statement. The offer is based on a request by the Penang state government that appointed SRS Consortium as the project delivery partner of the Penang Transport Master Plan (PTMP), which includes the Penang LRT, through an open tender in August 2015, he noted.

“That is why the term we used here is single source request for proposal, the reason is that we (federal government) do not have a contractual obligation with SRS Consortium. The one that has a contract obligation with SRS Consortium is the Penang state government.

“We do not want to complicate the matter, because if we don’t appoint them, there will probably be a legal issue with the Penang state government. Because Penang has awarded the contract to them, so if federal takes over and this project is not implemented by them, there might be legal issues,” Loke told a news conference on Friday.

Value, details of contracts to be negotiated between SRS Consortium and MRT Corp

The value and details of the contracts are subject to negotiations between SRS Consortium and project developer and asset owner Mass Rapid Transit Corp Sdn Bhd (MRT Corp), which is wholly-owned by the Finance Ministry, Loke said.

“To be fair to us [federal government], we have to negotiate with them. Because it was the state government that negotiated with them previously, not the federal government. We can’t give them the contract outright. There needs to be a process for negotiation,” he said.

The remaining 40% stake in SRS is equally owned by Loh Phoy Yen Holdings Sdn Bhd and Ideal Property Development Sdn Bhd.

The first segment covers Silicon Island to Komtar and is part of the 29km Penang LRT that will also cross into Penang Sentral in Seberang Perai on the mainland to provide connectivity to the existing KTM Komuter and ETS train network.

Under Budget 2024, the federal government budgeted RM10 billion to take over the Penang LRT project, while downsizing the size of reclamation works originally planned under PTMP.

“One of the conditions for the federal government to take over this project is that the reclamation project must be reduced. Prior to this, there were three islands that needed to be reclaimed below Silicon Island, so out of the three islands, the federal government had requested that [the state government] only limit the reclamation to one island,” Loke said.

With the Cabinet decision on Friday, Loke said the federal government has officially taken over the Penang LRT project from the Penang state government.

Moving forward, the federal government will evaluate the best project financing methods, either through development allocation from the annual budget, or other appropriate methods.

The offer to SRS Consortium marks another step forward for the project proposed as far back as 2012 under PTMP, which was adopted in 2016 by the state government. The Cabinet approved development of the project on March 22, 2024.

It is still too early to disclose the budget for the first segment, Loke said.

“SRS has also carried out preliminary technical and design studies in addition to obtaining the approvals for the environmental impact assessment, social impact assessment and the conditional railway scheme,” he said. “All of these efforts were previously funded by the SRS Consortium.”

Open tender for second and third segments of Penang LRT

For the second segment of the Penang LRT, also known as the Penang Mutiara Line LRT, which covers the train line from Komtar to Penang Sentral, Loke said the MOT will open a tender for any companies, both international and local, to participate.

The third component of the Penang LRT project would involve another open tender for the turnkey contract of systems and rolling stocks on a Build-Maintain-Transfer (BMT) basis.

Construction works for the Mutiara LRT line is targeted to start by this year, Loke said, and is expected to take about six years to complete.

“The [cost for] acquisition of lands have indeed been budgeted. Previously, under the state government, they have identified how to minimise land acquisition. It doesn’t involve the acquisition of many buildings, so the acquisition of land is relatively minimal. The alignment has already been studied and decisions have been made so we are going to maintain that alignment,” Loke said.

In addition, Loke said an operations depot will be developed together with the transit-oriented integrated development project at Tapak Pesta, Sungai Nibong as a joint venture between MRT Corp and the Penang state government.

“This new strategy aims to generate additional non-fare revenue that is important to be reinvested in the maintenance of the Penang LRT in the future,” he added.