This article first appeared in The Edge Malaysia Weekly on June 16, 2025 - June 22, 2025

THE civil works package for the Gamuda Bhd (KL:GAMUDA)-led SRS Consortium Sdn Bhd in the Penang Light Rail Transit (LRT) project is likely to be less than RM8 billion, say sources.

This follows a value engineering (VE) workshop that determined the price to be lower than estimated in January this year when the government awarded SRS Consortium the first of the three work packages in the RM17 billion project.

SRS Consortium’s mandate is to undertake the civil works portion of the LRT, which stretches from the reclaimed Penang South Island, located beyond Bayan Lepas Airport, to the Komtar Building in the heart of George Town on Penang Island. The entire length is almost 24km and has 20 stations.

“After the VE workshop, Gamuda’s civil works package is likely to be between RM7.8 billion and RM8 billion. It will not exceed RM8 billion. As negotiations go down to the final details, MRT Corp’s own estimate is RM7.6 billion while Gamuda is looking at RM8 billion.

“This follows a downsizing of some elements of the construction package as passenger traffic is not expected to be high. For instance, the length of some stations has been reduced, hence the reduction in cost,” says a source.

The first phase of the Penang LRT job was a direct award to SRS Consortium under the “single source request for proposal” initiative by the federal government. This was because the consortium had already undergone a tender process undertaken by the Penang government in 2015, where it was chosen to be the project development partner (PDP) for the LRT.

In 2015, the plan was for the Penang LRT to run from the reclaimed island, now called Silicon Island, to Komtar. It had an estimated cost of RM10 billion. The SRS consortium would be repaid through land that was to be reclaimed in the south of Penang after Bayan Lepas.

The state government’s plan drew protests from fishermen in Penang Island and Perak as well as those who claimed their livelihoods would be affected if the massive reclamation works were to proceed.

The original plan in 2015 was to reclaim 4,500 acres, to be built into three islands. In 2023, Prime Minister Datuk Seri Anwar Ibrahim downsized the land reclamation works to one island measuring 2,300 acres. He also said the federal government would take over the LRT project. The following year, the federal government officially took over, with MRT Corp being the project developer and asset owner.

The project is broken into three packages, with the first being the civil works from Silicon Island to Komtar. The second package is the systems work for the entire alignment, which includes rolling stock. The third is the construction of a link from the Jalan Macallum station on the island to Penang Sentral, which is located on the mainland in Butterworth.

Gamuda holds 60% interest in SRS Consortium, while Loy Phoy Yen Holdings Sdn Bhd and Ideal Property Development Sdn Bhd each hold 20%. Loh Pho Yen Holding is linked to the Boon Siew family while Ideal Property is majority-owned by Tan Sri Alex Ooi. 

After MRT Corp took over the project, it was said that the systems package and connection from Komtar to Penang Sentral, which crosses over the sea, would be tendered out. This was to give other construction groups an opportunity to participate in the Penang LRT project, which is the single largest infrastructure work to be carried out since Anwar took over the helm in Putrajaya in November 2022.

The tender for the systems package, which is estimated to be less than RM3.5 billion, closed on June 16, with at least seven companies participating.

Among the seven is Gamuda, which is bidding for the systems package alone.

MRT Corp has imposed several conditions for companies tendering for the job. These include that the tenderer must have completed RM500 million worth of urban railway jobs in the last 10 years, the rolling stock operator must have a plant in Malaysia, and the company should not have incurred losses in the last five years.

The tenderer is also required to come up with proposals for a leasing model for the rolling stock, for a period of up to 30 years and with an obligation to maintain the systems for at least seven years. It is the first time MRT Corp has added such conditions for bidders.

“This is to ensure that contractors do not just supply and walk away after the guarantee period ends. The maintenance clause is to ensure there is some level of continuity in the commitment to see that the system has support,” says a source.

The tender for the systems package, which was supposed to be over last month, is finally closing after six addendums and 14 clarifications.

“The addendums came about due to the changes in the scope for the civil works in the first package that was awarded to SRS Consortium,” says the source.

Gamuda is said to have partnered with China Railway Rolling Stock Corp (CRRC), which has a plant in Batu Gajah for the rolling stock, and Hitachi of Japan for the signalling works.

The other parties believed to have put in their bids for the package are MMC Engineering, YTL Group, Berjaya Rail, which is under Berjaya Group, Malaysian Resources Corp Bhd (KL:MRCB), Dhaya Maju Infrastructure (Asia) Sdn Bhd (DMIA) and a joint venture between Lion Pacific Sdn Bhd and WCT Holdings Bhd (KL:WCT).

MMC Engineering’s rolling stock partner is Hyundai-Rotem. The others in the consortium are Hitachi for signalling works and Emrail Sdn Bhd for track works. Hyundai-Rotem provided the rolling stock for phase two of the Mass Rapid Transit (MRT) project.

The rolling stock for phase one of the MRT was provided by Siemens. Both Hyundai Rotem and Siemens used the SMH Rail Sdn Bhd plant in Rawang for assembly of the rolling stock.

“MMC Engineering and Hyundai Rotem have given a commitment to build a new plant for the rolling stock in Malaysia in their proposal. They have also come up with a leasing model,” say sources.

YTL and Berjaya Rail have also partnered with Emrail for the track works. YTL’s rolling stock partner is said to be CRRC while Berjaya Rail is said to be partnering with a China-based company. For signalling works, Berjaya Rail is believed to be teaming up with Hitachi while YTL could be linking up with Siemens.

Siemens is also teaming up with the Lion Pacific-WCT partnership for the signalling package. China Harbour and Engineering Co (CHEC) is the partner for track works while China High Speed Rail Co is the partner for rolling stock.

Lion Pacific partnered with George Kent for the Ampang LRT extension job and completed the railway link between Subang Jaya and Subang Airport.

“Lion Pacific is taking the lead in the project, with a 51% equity stake while WCT has 49%. The consortium is banking on the execution track record of Lion Pacific in completing railway projects,” says the source.

MRCB is said to be teaming up with Alstom for both the signalling and rolling stock components. Alstom is leading the works for the KLIA Aerotrain project while MRCB is the PDP for phase three of the LRT from Bandar Utama in Selangor to Klang.

DMIA is believed to have partnered with Siemens for the signalling portion and CRRC for rolling stock. DMIA is currently undertaking phase two of the Klang Valley Double Track rehabilitation job.

“The competition is quite keen for the systems package. Even newcomers such as Berjaya Rail and WCT have put in strong bids with experienced partners. The proposals that require the least financial commitment from the government would have an edge.

“That is why MRT Corp has a leasing model option in the tenders,” says a consultant.

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