CONTRACTORS for the Light Rail Transit 3 (LRT3) project have taken Prasarana Malaysia Bhd to task for failing to disburse their dues on time, resulting in financial hardship that threatens to ruin their businesses.
Last week, 17 contractors who were appointed to complete the Light Rail Transit 3 (LRT) project sent appeal letters to Putrajaya’s top officials, urging them to step in and release more than RM700 mil owed for works done on the project.
According to The Malaysianist portal, three letters dated Dec 30, 2020 and signed by the companies’ chiefs were addressed to Prime Minister Tan Sr Muhyiddin Yassin, Finance Minister Tengku Datuk Seri Zafrul Tengku Aziz and Transport Minister Datuk Seri Dr Wee Ka Siong.
Bearing the title Constructions and Completion of Guideway, Stations, Park and Ride, Ancillary Buildings and Other Associated Works for Light Rail Transit Line 3 from Bandar Utama to Johan Setia: A Plea for the Release of Payment for Work Done, signees of the letter are:
- Minconsult Sdn Bhd chief executive Datuk Dennis Ganendra
- MMSB Consult Sdn Bhd Datuk Ashok Kumar Sharma
- MRCB George Kent Sdn Bhd project director Hwang Chee Leong
- Reaplite Industries Sdn Bhd executive director Sebastian Then
- Mudajaya Corporation Bhd operations director Anthony Teoh
- WCT Bhd executive director Liang Kai Chong
- Gabungan Strategik Sdn Bhd operations director Bakri Ishak
- Apex Communications Sdn Bhd executive director Datuk Ahmad Amer Awang
- Rahimkon Sdn Bhd operations director Mohd Khalil Dan
- Sunway Construction Sdn Bhd operations director Liew Kok Wing
- Pembinaan Jaya Zira Sdn Bhd operations director Datuk Adi Munawar Md Din
- SN Akmida Holdings Sdn Bhd operations chief Datuk Shukry Md Saad
- Trans Resources Corporation Sdn Bhd executive director Datuk Abdul Aziz Mohamad
- Emrail Sdn Bhd chief executive Amrish Hari Narayanan
- Hisniaga Sdn Bhd operations director Datuk Habib Ismail
- Primercon UTEC Consortium director Chan Wai Meng
- Blueprint Projects Sdn Bhd director Datuk Mohamad Ariff Abdullah
“The contractors claimed that Prasarana has not paid them since July and the accrued amount Prasarana confirmed but still withheld up to October was more than RM700 mil,” divulged The Malaysianist.
“This amount is expected to balloon to RM1 bil as of Dec 31 last year, taking into account work done up to that point.”
The livelihood of 10,000 workers as well as financial commitments to subcontractors, suppliers and stakeholders as well as banks are at risk, said the companies, adding that they had to rely on internally generated funds to ensure targets set by Prasarana are met.
Coupled with the COVID-19 crisis, the contractors – including their Bumiputera peers – said they were facing tight cash flow and might not be able to complete the project on time.
LRT 3 is 43.24% done and is due for completion in 2024.
Interestingly, The Malaysianist attributed the issue to Prasarana’s chairman Datuk Seri Tajuddin Rahman who “has been over-stepping his boundaries by getting involved in executive decisions.”
“This is no mere storm in the teacup as the latest flashpoints call to question the political interference in the national transport operator which in turn casts doubt over its fiduciary duty to the Malaysian public,” noted the online news publication.
“Tajuddin has also been accused of involving himself in two major decisions: the suspension of its president and the possible termination of a development project.”
The suspension of Prasarana president and group CEO Muhammad Nizam Alias is believed to be because he showed signs of insubordination when the board and Tajuddin instructed him to investigate MRCB-George Kent Sdn Bhd over LRT 3, according to The Malaysianist.
Prasarana currently maintains and operates Malaysia’s two LRT networks, namely the Kelana Jaya line and Ampang-Sri Petaling line as well as the KL Monorail, bus rapid transit Sunway line, and bus services in Kuala Lumpur, Penang, Kuantan and Kamunting.
It is also the operator of the mass rapid transit service in the Klang Valley.
But, the group has been bleeding red since 2014. According to its latest financial results ended December 31, 2019, Prasarana registered a loss of RM3.61 bil on the back of RM842.09 mil in revenue.
Its total liabilities for the year stood at RM35 bil compared to total assets of RM1.29 bil.
In Prasarana’s 2019 annual report, External auditor Ernst & Young PLT said as liabilities exceeded assets, “these conditions indicate the existence of material uncertainties that may cast significant doubt on the group’s and the company’s ability to continue as a going concern and, therefore, the group and the company may be unable to realise their assets and discharge their liabilities in the normal course of business”.
Tajuddin is expected to hold a media conference at 4pm today (Jan 4) to address some of the afore-mentioned allegations. – Jan 4, 2021
