In Malaysia, sadly, just about everything is politicised. Get a break, politicians. A project which gives a benefit to the rakyat should be acknowledged for once.

And no, I am not part of the Umno-BN election juggernaut - far away from that! I am just an engineer who is doing his bit to contribute to the country via this national project. Here is my perspective, as part of the company which is the main contractor for the MRT Underground Package.

There is a reason on why Najib Abdul Razak was able to declare that the actual MRT Line 1 Project cost is RM2 billion less than the stipulated project cost of RM23 billion - even though only Phase 1 is operating at the moment.

The relevant term to explain this is - ‘Contract Value’.

NOTE: The MRT Line 1 consists of 2 Phases.

• Phase 1 is from Sungai Buloh to Semantan. Successfully commenced operation in December 2016.
   
• Phase 2 is from Muzium Negara to Kajang. Phase 2 operation is scheduled on July 2017.

A bit of a Construction Contracts crash course for all of you.

When a Construction Contract has already got a stipulated value to it, say, a total Contract Value of RM23 billion for the total cost of the MRT Line 1 construction, any excess cost would have to be borne by the Contractor(s) and also by the Project Delivery Partner for this specific Project if they fail to complete the Project within the stipulated Contract Value for whatever reason.

This will not be the case if the Client (MRT Corporation in this case) grants a Variation Order (VO) for the work to proceed due to whatever reasons such as technical changes, coordination with other nearby development, etc.

A Variation Order (VO) is when the Client grants a change from the Contractual provisions, which can involve a change in the Contract Value itself.

And to get a VO request being approved by the Client is not easy. It has to undergo a stringent process.

Take the MRT Line 1 Underground Stations as a good example of how difficult it is to get a VO request approved by the Client. Initially, the Sprinkler system was not meant to serve the public areas for the MRT Underground Stations. When you mention about the Sprinkler system, this includes the main piping, range piping, and the hundreds of sprinkler points that come with it. Even the original MRT Underground specifications never mentioned about any requirement for the Sprinkler system at the MRT public area.

But then Bomba disagreed, and they insisted that the Sprinkler system was necessary. Hence, we had to add the Sprinkler system. We tried to request for a VO to the Client since this was considered as an additional item with regards to the Contract Requirements. However, since there is a Clause somewhere which states that the Requirements of the Authorities would have to be fulfilled, our VO claim was rejected. The change would have to be done at our own cost.

A simulated case for further understanding:

• Let us say that MRT Corp instructs MMC Gamuda to add one extra room. Say, that the original Contract requires MMC Gamuda to construct 50 rooms within an MRT Station at a cost of RM30 million.
   
• Thus, with the 1 additional room, the cost would increase by, say RM1.5 million.
   
• MMC Gamuda will then make a VO request since this is an additional requirement as compared to the existing Contract requirements.
   
• So, whenever MRT Corp approves this VO request, the total Contract Value shall be increased to RM31.5 million for this case.
   
• Therefore, this is how a Project value/cost increases. Thus, you do not simply increase the project cost without any reason.

Back to the case earlier, the total Contract Value for the construction of the MRT Line 1 is RM23 billion.

I have given you the concepts above.

Thus, I believe that all of you would now have a clearer picture on why Najib dared to declare that the total MRT Line 1 cost is RM2 billion under the stipulated Contract Value at this point of time?

On Rafizi’s claim that the total cost of the MRT project is more than RM100 billion

I shall not comment much on that here, since the Scope of Work in which I am involved in this Project is as a Contractor.

The Client (MRT Corporation) ie the Project Owner shall be responsible in answering those claims since:

• They were the party who set the amount of the Contract Value.
   
• They chose the winning Contractor for the Project out of a number of bidding tenderers, after the evaluation of the bids.

And, they have answered Rafizi Ramli’s claims via a statement released at their MRT Malaysia Facebook page on Dec 24, 2016.

What I can say here is that MMC Gamuda, as the Contractor (and addionally as the Project Delivery Partner via a separate entity) of this Project shall adhere to the total stipulated Contract Value. This is our Scope of Work.

Try and ask Rafizi, does he know of any other tenderers who can offer a cheaper pricing and who can also provide a similar or more competent engineering service at the time of tendering?

References for the awarding of the tenders for the Line 1 and 2 Underground Packages:

Underground Line 1:

“The consortium also offered the most competitive price at RM8.2 billion to design and build the 9.5km MRT underground tunnel and seven underground stations,”

Underground Line 2:

Mass Rapid Transit Corporation Sdn Bhd (MRT Corp) has awarded the RM15.47 billion underground works package for the MRT Line 2 to MMC Gamuda KVMRT (T) Sdn Bhd (MGKT).

“Nevertheless, for this tender, I can reveal that the best evaluated tender had the best score for the technical evaluation and also had the lowest price,”

NOTE: The ones specified in the links above are for the Line 1 and 2 Underground Packages only, and do not include the Elevated Packages. Hence, you can observe that cost was a factor on determining the winning tenderer.