Prasarana denies halting payments to LRT3 project contractors

PRASARANA Malaysia Bhd has denied that the group halted the payment to the turnkey contractors of MRCB-George Kent Sdn Bhd (MRCBGK) for the Light Rail Transit 3 (LRT3) project.

Prasarana chairman Datuk Seri Tajuddin Abdul Rahman said the group had paid RM3.468 bil as at Oct 2 last year for the portions of the project that had been done by MRCBGK so far.

However, for the invoices amounting to RM380 mil dated Oct 8 and Nov 8 last year, he said the payment had not been made as the group was still doing the due diligence exercise on the invoices.

In a media briefing yesterday, he said the group’s current cash flow due to the COVID-19 pandemic had caused Prasarana to review its expenses to ensure the company’s financial position remain healthy.

He said the group had to allocate around RM300 mil per month to sustain its operation.

A news report recently said that 17 contractors appointed to complete the LRT3 project sent appeal letters to Putrajaya’s highest officials, urging them to step in and release more than RM700 mil for works done on the project.

The three letters dated Dec 30 and signed by the companies’ chiefs were addressed to Prime Minister Tan Sri Muhyiddin Yassin, Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz and Transport Minister Datuk Seri Wee Ka Siong.

Commenting on this, Tajuddin said the claim, which was made by MRCBGK’s sub-contractors, should be addressed to MRCBGK, and not Prasarana, as payments to the subcontractors were the responsibility of MRCBGK.

“We are making payments to MRCBGK for the works that have been done, and they (MRCBGK) should be to the one to make the payments to their subcontractors, not us.

“However, we are continuously monitoring. As the project owner, we would want to see the project to be successful,” he said.

To date, Tajuddin said, the group still had about RM2 bil in cash, which would be used to sustain its monthly operation requiring around RM300 mil per month.

“We have obtained the approval to raise the next tranche of bonds in January, but it not necessarily has to be now. We have to also look at the current market sentiments. This matter is being handled by our board and finance department,” he said.

The group is also waiting for capital injection from the Government through the Budget 2021 allocation.

“For us to run Prasarana, it costs us about RM300 mil per month, consisting of operating expenditure, capital expenditure and bond interest payment. The RM2 bil fund will run out very quickly unless we get the capital injection form our shareholder.

“As of now, the board has to be very prudent as to which bill we have to pay first until our funding comes in. That is also why we cannot confirm when the payment is going to be made,” he added. – Jan 5, 2021.

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