MMC-Gamuda has retained its contract to build the entire MRT2 project after agreeing to cut RM3.6 billion in costs for the underground half of the line.

Finance Minister Lim Guan Eng said as a result of this, the construction cost for MRT2 - excluding interest, land acquisition, and other costs - has been reduced by RM8.82 billion or 22.4 percent from RM39.95 billion or RM30.53 billion.

"The final cost savings of RM8.82 billion or 22.4 percent for MRT2 will reduce future fares that need to be paid by MRT users, which would inadvertently increase the usage of public transportation in the Klang Valley.

"Today, the cabinet has agreed to MMC-Gamuda’s new offer and the cost rationalisation exercise.

"All above-ground stations will continue to be built as planned earlier while two underground stations - Bandar Malaysia (North) and Bandar Malaysia (South) - will be postponed, bringing the total number of stations from the original 35 to 33 now," Lim said in a statement today.

MMC-Gamuda had originally proposed a reduction of RM2.13 billion for the underground works, which the Finance Ministry rejected.

Following this, the Finance Ministry moved to terminate and re-tender the contract for the underground portion of the line.

MMC-Gamuda subsequently went on a campaign to claim that this would cost massive job losses and a flood of lawsuits.

Putrajaya dismissed the claims, saying that the staffers can resume work once new contractors for the underground portion are hired.

However, Prime Minister Dr Mahathir Mohamad then pushed for the Finance Ministry to conduct final negotiations with MMC-Gamuda, after which the RM3.6 billion cost reduction was agreed to.

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