KUALA LUMPUR: The government will likely complete the cost review of the Mass Rapid Transit Line 3 (MRT3) project by June and award construction contracts soon after, analysts said.
A joint venture between MMC Corp Bhd and Gamuda Bhd is expected to "convincingly' bag CMC303, which at an estimated more than RM14 billion, is the biggest work package among MRT3's civil contracts.
IJM Corp Bhd and Malaysian Resources Corp Bhd (MRCB) are frontrunners to secure other major civil contracts dubbed CMC301 and CMC302.
The government wants to bring down the MRT3 cost to about RM45 billion from RM50 billion.
During the retabling of 2023 Budget, Prime Minister Datuk Seri Anwar Ibrahim said the government was confident of reducing the MRT3 cost to under RM45 billion from RM50 billion announced by the previous government.
Affin Hwang Capital senior associate director Loong Chee Wei said MRT Corp had requested for the tender validity for the CMC301-303 civil work packages submitted by contractors to be extended by three months to end-June.
"This is an indication that the civil work packages could be awarded by mid-2023," Loong said in a report today.
He said most of the construction companies had submitted tenders for the three civil packages (CMC301-303) with tender price breakdown between construction services and contractor financing.
"Hence, the government could award the civil work packages based on the tender prices submitted for construction services and ignore the contractor financing portion. This will avoid the need to retender the three civil work packages."
It was reported that MRCB, YTL Corp Bhd and MMC-Gamuda joint venture had submitted the lowest bids for CMC301, CMC302 and CMC303 civil work packages at RM2.9 billion, RM10.8 billion and RM13.3 billion respectively.
Loong said while YTL had submitted the lowest bid for the CMC302 package, IJM had a good chance to win the contract despite submitting the second lowest bid at RM11.8 billion.
This is given IJM's strong track record in undertaking MRT projects (completed MRT1
and MRT2 civil work packages previously).
An industry observer said the CMC303 package, which includes a 10-km underground track, should have mild tender competition due to the stringent requirements.
"Gamuda could be the convincing winner of the package given its past track record in monopolising the tunnelling works," the observer said.
Meanwhile, Loong said at the MRT3 cost cutting was achievable through cost savings in project management, land acquisition, construction optimisation and financing costs.
"Financing costs could be reduced by removing the previous requirement for contractor financing for the first two years of construction as government's financing cost will be lower," he added.