KUALA LUMPUR: The government has reinstated Dhaya Maju Infrastructure (Asia) Sdn Bhd (DMIA) and its partner Lembaga Tabung Angkatan Tentera (LTAT) as contractors for the second phase of the Klang Valley Double Track (KVDT) rail upgrade project.
Transport Minister Anthony Loke told the Dewan Rakyat today that the decision was made after much "deliberation and debate" by Cabinet despite its earlier decision to cancel the contract and hold an open tender instead.
He said the government had taken into consideration various aspects, including legal implications and technicalities, before making the decision.
"(We) decided to terminate the contract with DMIA-LTAT in September last year (following a review).
"However, we have also considered the legal implications which would see the government spending a huge sum as compensation to the contractors who had signed the agreement with the previous administration on April 4 last year, two days before Parliament was dissolved.
"The compensation could reach RM2.5 billion according to the contractors, although it has yet to be verified," he said in reply to a supplementary question by Ahmad Fahmi Mohamed Fadzil (PH-Lembah Pantai) during the ministerial question time.
Loke said that Cabinet has also taken into consideration views from KTM Bhd as the railway operator.
The second phase of the KVDT project covers the rehabilitation of two KTM Bhd railway tracks measuring over 110km betwen Salak South and Seremban, and between Kuala Lumpur Sentral and Angkasapuri to Port Klang.
The first phase involved the upgrading of systems work between Rawang and Seremban, and from Sentul to Port Klang, involving about 150km at a cost of RM1.3billion, which was awarded to DMIA.