MRCB-George Kent says Prasarana’s October payment only for works done up to June

Malaysiakini - LRT3 to continue, to cost RM16.6b

KUALA LUMPUR : Light Rail Transit 3 (LRT 3) contractor MRCB-George Kent Sdn Bhd (MRCBGK) said Prasarana Malaysia Bhd’s payment on Oct 2, 2020 were only for construction works done up to end-June 2020.

In a statement, MRCBGK Project Director Patrick Hwang said Prasarana’s delayed payments of more than RM700 million were from July 2020 to October 2020, which have been certified for payment by Prasarana’s independent consultant, KL Prima Consult Sdn Bhd.

As of October 2020, the certified payment owed to the contractor is RM723.89 million, while November 2020’s payment amount is still pending certification, MRCBGK noted.

Hwang said MRCBGK has advanced more than RM200 million to sustain the LRT3 project. He also noted that both parent companies Malaysian Resources Corp Bhd (MRCB) and George Kent (M) Bhd have given a corporate guarantee to Prasarana to undertake the project, and issued a paid-up capital of RM5 million each.

LRT3 Package GS07&08, Klang Valley - Sunway Construction

“We wish to point out that the LRT3 Work Package Contractors’ (WPC) contracts were awarded by Prasarana Malaysia via an open tender process in 2016. The successful bidders including Bumiputra contractors were novated to MRCB George Kent as WPC in 2019. We have treated our WPC fairly by applying the contract rates as stipulated in the original contract with Prasarana Malaysia.

“We have also exceeded the minimum 30% Bumiputra quota by having 39.7% Bumiputra contractors in the LRT3 project. The breakdown of our contractors is as follows: local (52%), Bumiputra (40%) and foreign (8%),” it noted.

The LRT3 project’s overall line-wide progress was 45.8% as of Dec 31, 2020.

“We will continue to work with Prasarana Malaysia in a professional way to resolve all matters to ensure smooth delivery of the project,” Hwang said.

MRCBGK’s statement came after Prasarana’s non-executive chairman Datuk Seri Tajuddin Abdul Rahaman told a press conference today that Prasarana had paid RM3.47 billion to MRCBGK up to Oct 2, 2020. He also said Prasarana had not withheld any payments to MRCBGK.

The chairman’s claim came a few days after news report indicated that 17 contractors and consulting firms for the Light Rail Transit 3 (LRT3) project had jointly written a letter to Prime Minister Tan Sri Muhyiddin Yassin, the Ministry of Finance and Ministry of Transport, to seek help for payment of more than RM700 million withheld by Prasarana for work done.

The 17 firms said Prasarana had not paid them since July, and that the contractors were owed RM700 million as of October. They also noted that if taking into account work done in December, this amount would exceed RM1 billion.

Shares of MRCB finished 5.26% or 2.5 sen lower at 45 sen apiece, giving it a market capitalisation of RM1.99 billion. It saw 10.24 million shares done.

Meanwhile, George Kent shares declined by 2.56% or two sen lower at 76 sen, yielding a market value of RM428.08 million. It saw 1.93 million shares transacted.

By : Arjuna Chandran Shankar – THE EDGE MARKETS

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