KUALA LUMPUR – Prasarana Malaysia Bhd is believed to be seeking a new partner to replace George Kent (M) Bhd as the joint-venture (JV) contractor for the Light Rail Transit 3 (LRT3) project.
Quoting sources, The Edge reported that Prasarana supposedly had issues with the performance of George Kent (GK) which had formed a JV company with Malaysian Resources Corporation Berhad (MRCB), called MRCB-GK.
“After the change of government in 2018, and the revocation of the project delivery partner (PDP) contract with MRCB-GK by the government, the project has been held back.
“Among issues holding back the project is the renegotiation of the work packages with subcontractors. While this is not exactly the fault of GK, Prasarana is looking to have greater say in the construction of the project,” one of the sources was quoted as saying.
Both Prasarana and GK did not reply to enquiries over the matter.
However, another source said that MRCB is agreeable to GK’s speculated departure as the two companies allegedly have disagreements regarding the funding of LRT3’s construction works.
This seemed to be in tune with the notice of arbitration that GK had served to MRCB in August last year over disputes on the financing requirements for MRCB-GK.
“GK and MRCB have a difference of opinion in the interpretation of certain provisions of the shareholders agreement (SHA) with regard to the options for security of the financing requirements for the JV company,” read GK’s filing to Bursa Malaysia on August 13, 2019.
In an announcement on August 15, 2019, GK clarified that under the SHA, the working capital requirements of the JV company shall be obtained firstly by the retained earnings of the company.
If the first option is not enough, the JV company can then obtain borrowings and credit facilities from third parties including financial institutions, and lastly by the issuance of new shares or loans by the parties proportionate to each shareholder’s holding of ordinary shares in the JV company.
MRCB-GK was appointed as the PDP for LRT3 on September 4, 2015 with a contract worth RM16.63 billion, which was revised following the change in government in 2018 to RM11.4 billion. – The Vibes, December 12, 2020.
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