KUALA LUMPUR, Oct 8 — MMC Gamuda told the government today that its termination as the underground contractor for the Mass Rapid Transit Line 2 (MRT2) project will cause over 20,000 people to lose their jobs.

MMC-Gamuda KVMRT Sdn Bhd, a joint venture between Gamuda Bhd and MMC Corp Bhd, also said its termination would expose it to a “flood” of lawsuits for compensation from terminated employees, subcontractors, suppliers and manufacturers.

“In an international re-tender exercise intended by MOF (Ministry of Finance), unless MOF significantly lowers the requirements, only foreign contractors will be eligible.

“The award will invariably be given to a foreign contractor who, in turn, will use experienced staff from their own countries,” said MMC Gamuda in a statement.

MMC Gamuda said out of the 20,000 personnel from a supply chain of over 600 Malaysian companies, over 3,000 comprised MMC Gamuda JV staff and of this, more than 60 per cent were Bumiputera.

The company added that it has yet to receive notification from MRT Corp, a wholly-owned company of the Finance Ministry, of its termination as the underground contractor for the MRT2 project.

MMC Gamuda said it had offered a reduction of RM2.3 billion from the 60 per cent balance of uncompleted underground works valued at RM9.6 billion, representing 24 per cent of that value.

The reduction was achieved by shelving four out of 10 stations, as well as by reducing the scope of works and lowering specifications.

The company highlighted two main factors on the price of the underground works, namely the employer’s requirements for an expanded scope of works and stringent safety requirements.

“MRT Corp awarded the underground works to MMC Gamuda in 2016 following an international competitive tender that, due to the challenging ground conditions, had stringent pre-qualification requirements with only five contractors pre-qualified by MRT Corp to tender, of which MMC Gamuda was the only local contractor,” MMC Gamuda pointed out.

The company added that 40 per cent of underground works has already been completed.

“Even though MOF has made known that the offered reduction of RM2.3 billion is still not adequate, to date, it has not been conveyed to MMC Gamuda an acceptable target figure that MOF has in mind.

“If the target figure is made known together with the components of the savings as individual items, both parties would be placed in a better position to re-examine these components from where savings could be derived and narrow the differences,” said MMC Gamuda.

The Finance Ministry said yesterday that it would terminate MMC Gamuda’s underground work contract of the MRT2 and retender the pending underground work through an international open tender process, based on its belief that it could make “significant” savings.

https://www.malaymail.com/s/1680633/mmc-gamuda-says-its-termination-will-open-mrt2-project-only-to-foreign-firm