KUALA LUMPUR (May 3): “Advanced work” on the Kuala Lumpur-Singapore high speed rail (HSR) is slated to begin by the end of this year following the letters of award for the project delivery partners (PDPs) yesterday, according to MyHSR Corp Sdn Bhd.

“We have already received approval for our environmental and heritage assessments, while our social assessment is ongoing,” MyHSR Corp chief executive officer (CEO) Datuk Mohd Nur Ismal Mohamed Kamal said at a media briefing today.

According to MyHSR Corp, land allocations are currently in the process of being gazetted by respective state governments, through which the railway will run. 

Formal land acquisitions are expected to begin in 2H18, according to MyHSR Corp commercial director Tonny Yap.

As part of the works by the PDPs, more than 60 civil works packages are expected to be doled out, resulting in more than 5,000 sub-contract packages.

“At least 40% of the value of civil works will be allocated to bumiputera companies,” Mohd Nur Ismal said.

Yesterday, Gamuda Bhd and Malaysia Resources Corp Bhd (MRCB) announced that their joint venture had secured the letter of award to be PDP for the northern portion of the HSR, which will span approximately 135km.

Meanwhile, the joint venture between YTL Corp Bhd and TH Properties Bhd will act as PDP for the 200km southern portion.

“We decided to bring in two PDPs, because the project is just too big for one,” Mohd Nur Ismal said, declining once again to disclose the financial value of the awards.

CIMB Research in a note today maintained its estimate of between RM30 billion and RM40 billion for the combined PDP scopes.

The PDP fee, which has been estimated between 5% to 6%, was also undisclosed.

“All I can say is that it was a very competitive bidding process,” MRCB Gamuda consortium director Datuk Azmi Mat Nor said.

Meanwhile, the extension in tender submission date to December 2018 for the AssetCo, was made to avoid “unnecessary risk premiums”, Mohd Nur Ismal said.

“We have received requests for extensions from the respective bidders, as they need time to collect information,” he explained. He said more than two companies have expressed interest in bidding for the contract.

Mark Loader, project director of MyHSR Corp, maintained that the extension of the tender deadline would not delay any part of the construction schedule.

On the subject of political interference with the project, Mohd Nur Ismal agreed there would be significant costs to aborting the planned HSR.

“It would be a wasted opportunity if we don’t proceed,” Mohd Nur Ismals said. The spillover benefits into the local economy via created jobs and connectivity would be lost, he explained.

Pakatan Harapan’s candidate for prime minister Tun Mahathir Mohamad has said his coalition would review all mega infrastructure projects, if it were to be voted into power.