KUALA LUMPUR: DMIA Sdn Bhd has won a RM1.4 billion contract from the Transport Ministry to upgrade the Klang Valley double-tracking (KVDT) system for Keretapi Tanah Melayu Bhd (KTMB).
The job was awarded about two months ago under direct negotiations with the ministry.
DMIA had been lobbying for the project for more than three years.
The contract entails the upgrading of systems work between Rawang and Seremban, and from Sentul to Port Klang, involving about 150km, which is expected to cost around RM750 million.
The remaining sum is for the upgrading of tracks between Rawang and Salak South near Bandar Malaysia.
The KVDT was built in the 1990s by Indian Railway Construction and is running on old technology. The upgrading of the railway line is important as it offers an alternative and affordable mode of transport for commuters.
People close to DMIA said the company was preparing to call for tenders soon for sub-contract works for the project.
“This is a project fully-funded by the government. Any cost overrun will have to be borne by DMIA. The company is calling for tenders and will award the sub-contracts to suitable parties,” said a source.
DMIA will receive progressive payments from the government for the duration of the project.
The source said DMIA was targeting to maintain cost at between RM950 million and RM1 billion and keep profit margin at 25 per cent.
There is market talk that DMIA may rope in international expertise in the likes of Ansaldo, Siemens, Alstom, Thales Group and Bombardier for the systems work to spread out the risk.
“The only problem with international expertise is that cost may rise over time because of currency fluctuations. It also means that there will be less local participation,” said the source.
The controlling shareholder of DMIA is Datuk Subramaniam Pillai, a low-profile businessman.
DMIA had previously partnered Malaysian Resources Corp Bhd for the beautification and upgrading works of Little India in Jalan Tun Sambanthan, Brickfields, here, as well as other development projects in the area.