IJM Construction (IJMC), a wholly owned subsidiary of IJM Corp, has received a termination notice from MRCB George Kent Sdn Bhd (MRCBGK), previously the project delivery partner (PDP). It was to terminate IJMC as the Work Package Contactor for the underground package of LRT3 from Bandar Utama to Johan Setia. The contract was awarded on 13 March 2018, for the design, construction and completion of twin-bored underground tunnels, stations, ancillary buildings and other associated works.
What triggered the action? According to IJM Corp, the contract was terminated due to the LRT3 project being remodelled from a PDP structure to a fixed price contract. This was after the government’s decision to conduct cost review for mega infra works which were perceived as overpriced.
What has changed for the 37km LRT3? To recall, the project was previously under scrutiny, as the government sought to reduce its costs. The government’s prudent exercise has resulted the construction cost of LRT3 to drop by -47% to RM16.6b, with the PDP structure remodelled to a turnkey format. Partly, the approach for cost-cutting includes extending the completion timeline from 2020 to 2024.
Source: MIDF Research - 10 Jul 2019
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