Klang Valley Rail Contractor Insists Appointment Lawful, Questions Wee’s Bid to Reopen Tender

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Appointed contractor of the Klang Valley Double Track Project (KVDT2), Dhaya Maju LTAT Sdn Bhd publicly questioned the Perikatan Nasional (PN) government’s plan to end its contract and reopen tenders.

Dhaya Maju LTAT chief executive Datuk Mohamed Razeek Hussain cautioned that terminating its contract when the rail project is nearly a quarter complete would affect the quality besides incurring unnecessary, hefty legal costs.

In a statement today, he pointed out that progress of the project is currently at 24 percent, with RM350 million already invested to procure machinery and specialised equipment.

He also suggested that terminating and reopening the project for tender could jeopardise some 7,000 job openings created by the project and disrupt business and operations of some 261 supply and service companies involved.

“The sites would be left idle. The live tracks, adjacent to stretches where we have removed the rail and ballast, risks deterioration and movement which will be a danger to the trains and passengers.

“We cannot understand why there is a sudden rush to terminate the contract.

“The government needs to reconsider the direct impact to the economy during this Covid-19 pandemic, as well as look into the lead statistics and cost of termination,” Mohamed Razeek said.

Incumbent Transport Minister Datuk Seri Wee Ka Siong said last week that the Cabinet had agreed to reopen the tender for KVDT2.

Mohamed Razeek was responding publicly for the first time to ongoing debate over the award of the KVDT2 project through direct negotiations.

He said the KVDT2 is an important infrastructure project towards improving the public transport sector and that any “unjustified calls” to delay its completion would only cause problems and inconvenience to the public, in particular commuters.

“Until and unless formally informed, as a responsible contractor, we intend to continue to perform our obligations, under the contract, to ensure that the project is delivered on time and without delay,” he added.

The Finance Ministry had recently revealed that Dhaya LTAT was appointed through direct negotiations under then Pakatan Harapan (PH) government for a cost of around RM4.4 billion.

Former transport minister Anthony Loke rebutted, saying Dhaya LTAT was awarded the KVDT2 by the Barisan Nasional (BN) a day before Parliament was dissolved in 2018, and for an inflated cost of around RM5.6 billion.

Loke said PH reappointed Dhaya Maju LTAT after managing to renegotiate the continuation of the KVDT2 project at a lower cost without jeopardising quality.

Mohamed Razeek chided Wee for saying there was no legal or factual justification for such claims to be made on the rail project, saying the transport minister’s remarks showed poor understanding of the actual case background.

In his statement today, Mohamed Razeek detailed Dhaya Maju LTAT’s chronology of negotiations dating back to 2018.

He said a Letter of Award (LOA) was issued to the company on April 4, 2018, during BN’s reign.

He said Dhaya Maju LTAT began work on the project before PH terminated its initial contract on October 19, 2018 but reappointed the company on July 5, 2019 and reached a settlement agreement that saw the government issue it a new LOA.

“In return, Dhaya Maju LTAT waived all its claims against the Government for the wrongful termination.

“Following from this, we were appointed to continue with the KVDT2 Project under the Letter of Award dated 19 August 2019 at a lower contract sum.

“We are, therefore, dismayed and perplexed by the Minister’s statement based on some report in respect of the costs of the project which we are unaware of,” Mohamed Razeek said.

Following the agreement, Dhaya Maju LTAT was granted possession of the construction site on September 3, 2019. Mohamed Razeek said the company has been working on the project since then. – MMO