This article first appeared in The Edge Malaysia Weekly on January 20, 2025 - January 26, 2025

SOME of the big construction names have trained their sights on the balance of the works — estimated to be worth about RM9 billion — left to be done in the Penang light rail transit (LRT) project.

Among those that have attended briefings by MRT Corp are MMC Engineering Sdn Bhd, Malaysian Resources Corp Bhd (MRCB) (KL:MRCB), Gamuda Bhd (KL:GAMUDA), WCT Holdings Bhd (KL:WCT) and Dhaya Maju Infrastructure (Asia) Sdn Bhd (DMIA), which has taken over Pestech International Bhd (KL:PESTECH).

Other big names, such as IJM Corp Bhd (KL:IJM) and Sunway Construction Bhd (KL:SUNCON) also attended the briefings but are said to be keen to undertake the civil works that connect the line from Macallum Street on the island to Penang Sentral in Butterworth on the mainland.

Both IJM and Sunway Construction were contenders for package one, but MRT Corp awarded the RM8.3 billion job to a Gamuda-led consortium last week.

A newcomer to the scene is Berjaya Rail Sdn Bhd, which has done no major railway projects so far but has expressed interest in leading a consortium to undertake the high-speed rail (HSR) project between Kuala Lumpur and Singapore. The chairman of Berjaya Rail is Tunku Tun Aminah Sultan Ibrahim Ismail, the daughter of the King.

“The focus now is on the systems work, which includes the rolling stock, estimated to be worth up to RM4 billion. It covers the entire network from Silicon Island to Penang Sentral. The tender briefings have been held and bidders are to submit their proposals by April 14,” says a source.

The civil works package, which is the connection from the Macallum Station on the island to Penang Sentral on the mainland, is estimated to be worth RM5 billion and expected to be put out for tender in the third quarter of this year.

The entire project, which spans 35km one way, is the biggest infrastructure job under the administration of Prime Minister Datuk Seri Anwar Ibrahim.

The systems package has been broken up into two categories. Category One (Cat 1) comprises mainly the signalling, track works and supply of rolling stock, which essentially are the train sets. Cat 1 also includes maintenance for up to 10 years.

Category 2 (Cat 2) is mainly the power supply and telecommunications system.

“MRT Corp will decide on the best bids for Cat 1 and Cat 2. The winner of Cat 1 will have to work with the winner of Cat 2. Thus, the Cat 1 winner must have a systems integration track record and provide the overall guarantees,” says a construction industry official.

“The successful winner of Cat 1 is also to maintain the system and train sets for up to 10 years. MRT Corp wants to ensure that those who build the system are also there to ensure it is an up-and-running system for a few years after completion.”

The two main components of Cat 1 are signalling and the supply of rolling stock, which are the domain of foreign companies such as Alstom, Siemens Hitachi and China’s CCCC.

“As the signalling and rolling stock works are the domain of foreign parties, MRT Corp allows for bidders in Cat 1 to have foreign equity partnership of up to 49%,” says another source.

To this end, MRCB is said to be teaming up with Hartasuma Sdn Bhd. It is learnt that the consortium is looking to tie up with Alstom for the signalling and rolling stock works.

WCT has teamed up with Lion Pacific Sdn Bhd and Guangzhou Metro Consortium from China. China Harbour Engineering Co (CHEC), which has done a lot of land reclamation work in Penang and was also the contractor for the Second Penang Bridge, has also thrown its weight behind the WCT-Lion Pacific consortium.

Berjaya Rail is looking at forming a partnership with Emrail Sdn Bhd. Its foreign partner is believed to be Hitachi Rail, which took over Thales Ground Transportation Systems last May. The Thales system is used in most of the urban railway networks in Malaysia.

MMC Engineering is said to have formed an exclusive partnership with Hyundai Rotem of South Korea, the company that supplied the rolling stock for the MRT2 project. It may also tie up with Alstom if it lands the job.

The YTL group, via YTL Corp Bhd (KL:YTL), is likely to team up with a Chinese partner. YTL could also partner either Siemens or Hitachi, as it has worked with both companies on their railway jobs.

Gamuda could be bidding for the systems work with its Australian subsidiary, Downer Transport Projects (DTP).

Meanwhile, DMIA, which has a track record in track works, is tipped to work with SMH Rail Sdn Bhd and Siemens for the rolling stock and signalling. In the MRT 1 project, the rolling stock was assembled by Siemens in SMH Rail’s assembly plant.

It is learnt that all three international companies that provide signalling services to the urban railway projects in the country — Alstom, Siemens and Hitachi — have not entered into exclusive agreements with any of the major contractors.

“All three are working with at least one main contractor for the signalling job in Cat 1 of the systems package. They will team up with the company that wins the job,” says the first source.

As for Cat 2, Pestech, which is majority-controlled by DMIA, is the only local company that had undertaken several jobs for the power systems before being hit by financial troubles.

“Pestech has a design and implementation track record. It completed the MRT 2 and Subang Skypark railway projects. It then ran into financial difficulties, which is what caused its problems with the KLIA Aerotrain and Gemas-Johor Bahru electrified double-track projects,” says the source.

As for communications, ticketing and other jobs, several local players, including the Sapura group, have track records.

“The company that wins the contract for Cat 1 will team up with the winner of Cat 2 to undertake the job,” the source adds.

The tender for the civil works to build the 5.8km connection from Macallum Station on the island to Penang Sentral in Butterworth will open in the third quarter of this year.

Sources say the civil works that will cross the sea are expected to be worth about RM5 billion, but MRT Corp is looking at several options to reduce the cost.

“Gamuda has already been awarded the first package of RM8.3 billion covering 29.5km on the island. The second stretch may be more expensive on a per kilometre basis because it will cross the sea to the mainland,” says the second source.

It is believed that MMC Engineering, which has been taken private by Tan Sri Syed Mokhtar Albukhary, and MRCB appear to have the advantage in securing the tender for the civil works job for the connection to Penang Sentral because of their presence in the state.

MRCB owns the Penang Sentral transport hub; and MMC owns and operates the port on the mainland.

“MRT Corp has put a criterion of integration capabilities in the tender documents. On this score, MMC Engineering has the track record in integrating the various components of an urban railway project by virtue of having been one of Gamuda’s partners in the MRT 1 and MRT 2 projects,” says the industry official.

According to construction industry officials, the key criteria are that the successful bidders for the tenders must have completed at least RM500 million worth of railway works in the last 10 years and gained the experience of having integrated the various components of a systems work.

Companies such as Gamuda, YTL group and MMC have a track record in completing railway jobs. Gamuda and MMC undertook the MRT projects, whereas YTL group’s most recently completed railway project is the ERL link to the airport.

Others such as DMIA and MRCB are currently undertaking large railway-related projects in the Klang Valley. DMIA is the main contractor for the Klang Valley Double Track project and MRCB has the LRT3 project. YTL is also undertaking the Gemas-Johor Bahru electrified double-track project, which has yet to be completed.

Companies such as IJM and Sunway Construction should not be overlooked, as they bring a proven track record in execution and possess the financial strength to undertake the project without placing undue strain on MRT Corp.

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