independent engineer deal not finalised - "playing Hide n Seek"

SPNB says independent engineer deal not finalised

By Jahabar Sadiq
Editor

April 15, 2011

KUALA LUMPUR, April 15 — The owners of the proposed Klang Valley Mass Rapid Transit (MRT) have not finalised appointing an independent check engineer (ICE) but said any speculation over the fees will jeopardise its negotiations.
Syarikat Prasarana Negara Berhad (SPNB) group managing director Shahril Mokhtar said today it is committed to ensure transparency and timely delivery of this project in response to The Malaysian Insider’s report that a decision has been made.
“The appointment of the KVMRT ICE is not finalised. Speculation of the ICE fee quantum at this point will only jeopardise our ability to negotiate competitive fees from the ICE candidates.
“Prasarana will table the best negotiated fee to the Ministry of Finance, who is the final approving authority on this appointment,” he said in a statement issued this evening.
Shahril said the eventual appointed ICE “will be selected based on competitiveness of fees, track record, experience, reputation and conflict of interest.”
“The consortium led by HSS Integrated Sdn Bhd is one of the ICE candidates that is being evaluated at the moment,” he added.
Regarding the relationship between HSSI and project delivery partner (PDP) MMC-Gamuda joint-venture, Shahril said the PDP has clarified that “HSSI was one of the many local consultants who were engaged for the Electrified Double Track Project (Ipoh to Padang Besar).
“HSSI was appointed to design road bridges for the project in May 2007 and they completed their job in May 2008,” he added.
Shahril also said the ICE “is common for large-scale projects involving large capital expenditure and requiring a high degree of integration to meet the key objectives: implementation on schedule, and within budget and specifications”.
The Malaysian Insider reported that the SPNB board met yesterday to award the contract for two per cent of the undetermined project cost, which is reportedly above market rates.
The report said the consortium of HSS Integrated Sdn Bhd, Hong Kong’s MTR Corp Ltd and Canadian SNC-Lavalin is likely to land the contract despite being rejected by SPNB earlier for not putting a price to its brief — which usually costs up to 0.8 per cent of the total project.
The total project cost for the MRT was estimated at RM36.6 billion for three rail lines through the Klang Valley when it was first proposed two years ago but that projection did not include cost of land and also rolling stock for the MRT.
SPNB had also not finalised the financing and project manager’s fees for the MRT although planning has started for initial civil engineering work to begin in November.
Regulator Land Public Transport Commission (SPAD) had said the Finance Ministry has set up a special purpose vehicle (SPV) to raise funds for the project but had admitted the method has yet to be determined.
The SPNB chief had also said some 100 firms have applied for pre-qualification for the 16 packages in the elevated part of the 51km-long MRT; the deadline for pre-qualification ended on April 13.
The MRT is the country’s biggest infrastructure project and also the largest National Key Economic Area (NKEA) project under Prime Minister Datuk Seri Najib Razak’s New Economic Model (NEM).
The massive project is expected to generate 130,000 jobs during its five-year construction phase. The government hopes that more than half of the population in Greater KL will use the public transport system to prevent traffic congestion.