THE second phase of the Klang Valley double-track project (KDVT2), which was previously terminated, has been re-awarded to the original contractor for RM4.475 billion, 15% lower than the project’s original cost.

Transport Minister Anthony Loke said the renegotiated project, which will result in a saving of RM700 million, will go on for 7 years.

Loke told Dewan Rakyat today that the decision to reinstate the project to the original contractor, Dhaya Maju Infrastructure Asia (Sdn Bhd) (DMIA) and its partner Lembaga Tabung Angkatan Tentera (LTAT), was decided in a cabinet meeting on July 5. 

Fahmi Fadzil (Lembah Pantai-PKR) asked in a supplementary question why was the contract re-awarded to the company when it did a less than satisfactory job on phase 1 of the project, to which Loke said the contractor appealed the government’s decision and the contract was renegotiated.

“Yes, it is true that the cabinet decided to terminate the contract in September and we have issued a termination letter. However, they have appealed the decision and renegotiated the contract,” he said.

Loke said going ahead with the termination will also have legal repercussions as the company could drag the government to court.

“This is because the contract was awarded by the previous government on April 4, 2018, which was two days before Parliament was dissolved.

“If we don’t proceed, we will have to face legal implications, especially if the company is of the view that the government will have to pay some RM2.5 billion even though that has not been finalised. Nevertheless, there will be legal implications,” he said.

He said the government had given the contractors another chance to renegotiate the contract just like it did with other mega projects.

The first phase of the project was 80.33% complete as at June 30.

Thus far, RM1.12 billion has been spent on the first phase of the project, which entails rehabilitation of railway tracks between Rawang and Seremban and Sentul and Port Klang.

For the second phase, RM42.35 million has been spent.

Loke said the ministry took into account a letter by Keretapi Tanah Melayu Bhd (KTMB) regarding the project contractor.

“We have deliberated and debated on the matter. (There were) views that the project should not be continued. I cannot reveal too much on the matters discussed in the cabinet.

“Nevertheless, the collective final decision was to continue the project with DMIA and LTAT, after taking into account all the possible implications.”

He said safeguards will be put in place to ensure the project is carried out efficiently, and KTMB’s feedback will be sought. – July 9, 2019.