Meticulous Decision On Mutiara Line LRT Ensures Smooth Transition From State To Federal Govt

PUTRAJAYA, May 21 (Bernama) -- Every decision regarding the Penang Mutiara Line LRT project is made based on careful technical, legal and fiscal considerations to ensure that the people of the state have access to the public transport system.

The Ministry of Transport (MOT) in a statement today announced that the decision to use the Single-Sourcing Request for Proposal (RFP) mechanism for the procurement of the first package contract of the project is to avoid contractual disputes in terms of law.

“To understand why the RFP method is used, it is necessary to first understand the full history of this project. This project was originally a Penang State Government project under the Penang Transport Master Plan (PTMP).

“The financing model is through the proceeds of land sales from three islands to be reclaimed in southern Penang, known as the Penang South Islands Project (PSI),” the statement said.

To implement PTMP, MOT announced that the State Government appointed SRS Consortium Sdn Bhd as the Project Delivery Partner (PDP) through an open tender in August 2015

In March 2024, the Federal Government agreed to finance and fully take over the Mutiara Line LRT from the State Government on the condition that the reclamation project be limited to one island only, following Cabinet approval, with MRT Corp appointed as the developer and asset owner of the project.

“When the Federal Government took over, it had no direct contractual obligations with SRS Consortium, as the original obligations were between the State Government and SRS Consortium,” the statement said.

In addition, MOT announced that SRS Consortium had been involved in this project since the early stages and had in-depth institutional and technical knowledge related to track alignment, engineering studies, Environmental Impact Assessment (EIA) approvals, Social Impact Assessment (SIA) and Railway Schemes — all funded by SRS Consortium itself.

“This continuity is an important consideration to expedite the implementation of this critical public infrastructure project

“As a result of the project transition from state to federal, the decision to use this single-source mechanism was made following the request of the Penang State Government, to avoid legal contractual disputes, as SRS Consortium was appointed as the PDP for PTMP through an open tender by the State Government in 2015,” according to MOT.

This Single-Sourcing RFP mechanism is different from direct negotiations which do not involve any prior competitive process.

“Although the Single-Sourcing RFP method was used, this does not mean that the contract was awarded without careful review.

“After being appointed as the Developer and Asset Owner of the project, MRT Corp conducted a detailed engineering assessment and infrastructure study to refine the rail alignment, scope of work, and reassess the latest project cost estimates,” the statement said.

As part of this process, MOT informed that MRT Corp also obtained independent cost assessments from two separate quantity surveyors.

“Following the Cabinet Decision in March 2024, the contract procurement negotiation process commenced in April 2024 and lasted for approximately eight months. During this period, MRT Corp has already conducted a comprehensive commercial, technical, and cost assessment to ensure that the project achieves optimal value.

“Furthermore, the contract was also subject to a Value Management Exercise in April 2025 as part of ongoing cost optimization measures. This resulted in a final contract value of RM7.93 billion,” the statement said.

For the second and third packages of the project, an open tender process is mandatory, reflecting the government's commitment to transparency and healthy competition in public procurement.

-- BERNAMA