KUALA LUMPUR: MMC Gamuda KVMRT (PSD SSP) Sdn Bhd, a joint venture between Gamuda Bhd and MMC Corp Bhd, has been appointed the project delivery partner for the second Klang Valley mass rapid transit line 2 (MRT 2).

In a statement yesterday, Mass Rapid Transit Corp Sdn Bhd (MRT Corp) announced it has signed an agreement with MMC Gamuda KVMRT to have the latter become the project delivery partner (PDP) for the MRT 2 that will run from Sungai Buloh to Putrajaya.

MMC Gamuda KVMRT will be paid a fee of 6% of the actual cost of the construction of MRT 2 only if the key performance indicators (KPIs) are met. If not, the fees will be deducted based on a quantum agreed by both parties, the statement said. MMC and Gamuda each hold a 50% stake in the joint-venture company.

The estimated construction cost of MRT 2 is RM28 billion, excluding land and relocation costs. For the 6% fee, the joint venture would earn about RM1.68 billion in terms of fees for being the PDP.

According to the statement, among its KPIs are the delivery of the project within the agreed target cost and the target delivery date, compliance with safety, health and environment requirements, compliance with agreed quality standards and timely response to public complaints and the implementation of stakeholder management.

The construction of the line is expected to commence in the second quarter of 2016.

In separate filings with Bursa Malaysia yesterday, MMC and Gamuda said Phase 1 of the MRT 2 project is scheduled to be completed on July 31, 2021, while the completion date for the whole of MRT 2 is July 31, 2022.

Both said they will fund their share in the PDP through internal funds and bank borrowings, and that the award of the project is expected to contribute positively to their future earnings.

Meanwhile, MRT Corp chief executive officer Datuk Shahril Mokhtar, in the same statement, said the signing of the PDP agreement is a milestone for the development of the new line.

Shahril noted that MRT Corp has forged a good partnership with the joint venture for MRT 1 which links Sungai Buloh and Kajang.

He added that the Ministry of Finance and the Attorney-General’s Chambers have also agreed to the terms of the agreement.

MRT 2 stretches 52.2km, serving a corridor with a population of around two million people from Sungai Buloh to Putrajaya. The line will serve Sri Damansara, Kepong, Batu, Jalan Sultan Azlan Shah, Jalan Tun Razak, KLCC, Tun Razak Exchange, Kuchai Lama, Seri Kembangan and Cyberjaya.

The public inspection for MRT 2 is currently ongoing until Aug 17.

This article first appeared in The Edge Financial Daily, on July 14, 2015.