Penang Lrt Project Needs Third Party Oversight Says Anti Graft Ngo

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The federal government has committed to fully funding the Penang LRT project, which is divided into three contracts. (Bernama pic)PETALING JAYA: Independent oversight is needed for the Penang LRT project, says the anti-corruption group Transparency International Malaysia (TI-M), which said a big portion of the project is being offered directly to SRS Consortium Sdn Bhd
TI-M president Muhammad Mohan said that though a direct tender to SRS Consortium is warranted, given that they were behind the state’s transport master plan, the direct tender process calls for strict independent monitoring.
He said that even though the state government is not directly involved in the negotiations, third-party oversight remains highly important to prevent undue influence or corruption.
The federal government has committed to fully funding the 30km line, which is divided into three contracts. For the main line, a “single-sourcing request for proposal” mechanism was used, a form of direct tendering in which only one supplier is selected.
Gamuda Bhd subsidiary SRS Consortium was awarded the main line’s construction, while the remaining parts – a cross-channel line and turnkey systems with rolling stocks – will be open to competitive bidding.
Mohan said experts should be roped in to oversee the process and ensure all negotiations are conducted properly.
“With negotiations between MRT Corp and SRS Consortium, there must be independent oversight, especially when you have the project given out via a single source or direct tender.
“This means that they will have to report if there are red flags, the tender process is not done properly, cronies are involved, or government politicians have a hand in the project.
“These experts will make sure that negotiations are done properly and above board,” he said.
Transport minister Loke Siew Fook has defended the single-source RfP favouring SRS Consortium, since the company had independently funded the initial technical studies and designs, including environmental and social impact assessments.
Economist Lim Mah Hui said there were ethical and financial concerns regarding the award of the LRT project to SRS Consortium, following the company’s engagement in the Silicon Island reclamation project.
He said the privatisation of part of the reclamation project in 2021 disproportionately benefited SRS Consortium and its parent company, Gamuda, allowing them to reap substantial profits as the sole contractor and 70% majority shareholder. The state government owns the remaining 30% of the special purpose vehicle developing the project.
Citing data from SRS Consortium, he estimated that the Penang state government stood to receive only RM600 million, or 30% of the net revenue, from the reclamation of the first island while Gamuda receives the bulk of it on top of the revenue it earns as the contractor for the reclamation.
“Now, Gamuda is also offered the RM10.5 billion LRT project on a platter, without open tender. This decision grants Gamuda an undue advantage, consolidating significant control and financial gain from public projects into the hands of a single private entity,” he said. - FMT

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