LRT3 contractors owed RM700 mil by Prasarana turn to PM

Livelihood of thousands of workers, project completion now at risk

KUALA LUMPUR – Prasarana Malaysia Bhd is withholding more than RM700 million owed to contractors up to end-October for work done on the Light Rail Transit Line 3 (LRT3), putting at risk the completion of the project as well as the livelihood of thousands of workers, according to appeal letters sighted by The Vibes.

Three letters dated December 30 and signed by the chiefs of 17 contractors were addressed to Prime Minister Tan Sri Muhyiddin Yassin, Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz and Transport Minister Datuk Seri Wee Ka Siong, titled “Construction and Completion of Guideway, Stations, Park and Ride, Ancillary Buildings and Other Associated Works for Light Rail Transit Line 3 From Bandar Utama to Johan Setia: A Plea for the Release of Payment for Work Done”.

The chiefs of 17 contractors in the LRT3 project owed millions by Prasarana have submitted three letters dated December 30 to the prime minister, and finance and transport ministers. – File pic

The signees are:

1. Minconsult Sdn Bhd chief executive Datuk Dennis Ganendra

2. MMSB Consult Sdn Bhd Datuk Ashok Kumar Sharma

3. MRCB George-Kent Sdn Bhd project director Hwang Chee Leong

4. Reaplite Industries Sdn Bhd executive director Sebastian Then

5. Mudajaya Corporation Bhd operations director Anthony Teoh

6. WCT Bhd executive director Liang Kai Chong

7. Gabungan Strategik Sdn Bhd operations director Bakri Ishak

8. Apex Communications Sdn Bhd executive director Datuk Ahmad Amer Awang

9. Rahimkon Sdn Bhd operations director Mohd Khalil Dan

10. Sunway Construction Sdn Bhd operations director Liew Kok Wing

11. Pembinaan Jaya Zira Sdn Bhd operations director Datuk Adi Munawar Md Din

12. SN Akmida Holdings Sdn Bhd operations chief Datuk Shukry Md Saad

13. Trans Resources Corporation Sdn Bhd executive director Datuk Abdul Aziz Mohamad

14. Emrail Sdn Bhd chief executive Amrish Hari Narayanan

15. Hisniaga Sdn Bhd operations director Datuk Habib Ismail

16. Primercon UTEC Consortium director Chan Wai Meng

17. Blueprint Projects Sdn Bhd director Datuk Mohamad Ariff Abdullah

The contractors said they have not received payment from Prasarana since July, and “the accrued amount that had been confirmed by Prasarana up to October this year but being withheld is more than (RM)700 million”.

This amount is expected to increase to RM1 billion by end-December, taking into account work done up to that point, they added.

If the situation continues, the contractors said, it will put at risk the livelihood of 10,000 workers involved in the project, as they have to rely on internally generated funds to ensure the targets set by Prasarana are met.

“But we can’t continue to do so, given the huge arrears owed to us by Prasarana.”

LRT3 is 33% done and expected to be completed by February 28, 2024.

But this latest development, according to the contractors, will scuttle that plan, as they are now under pressure to ensure their financial commitments to their subcontractors, suppliers and stakeholders, as well as banks, remain intact.

“The Covid-19 crisis has also affected our ability to complete the project to the best of our abilities,” they said, citing the tight cash flow brought about by the pandemic, more so, the selected Bumiputera companies, as they lack financial reserves.

“We hope you will consider our appeal towards releasing the funds so as to lighten our financial burden.”

Prasarana is the national transport operator owned by Ministry of Finance Inc and governed by the Transport Ministry. But ever since the change of government in March, which saw Umno’s Pasir Salak MP Datuk Seri Tajuddin Abdul Rahman being appointed Prasarana chairman two months later, the company has been the subject of boardroom and managerial tussles.

The Vibes reported on December 8 that president and group chief executive (PGCE) Muhammad Nizam Alias has been suspended, with chief operations officer Datin Norlia Noah standing in as interim PGCE.

Prasarana currently maintains and operates Malaysia’s two LRT networks, namely the Kelana Jaya line and Ampang-Sri Petaling line, as well as the KL Monorail, bus rapid transit Sunway line, and bus services in Kuala Lumpur, Penang, Kuantan and Kamunting. It is also the operator of the mass rapid transit service in the Klang Valley.

But, the group has been bleeding red ink since 2014. According to its latest financial results ended December 31 last year, Prasarana registered a loss of RM3.61 billion on the back of RM842.09 million in revenue. Its total liabilities for the year stood at RM35 billion compared to total assets of RM1.29 billion.

External auditor Ernst & Young PLT, in Prasarana’s 2019 annual report, said as liabilities exceeded assets, “these conditions indicate the existence of material uncertainties that may cast significant doubt on the group’s and the company’s ability to continue as a going concern and, therefore, the group and the company may be unable to realise their assets and discharge their liabilities in the normal course of business”.


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