PETALING JAYA: Ekovest-MRCB JV Sdn Bhd, a 60:40-joint venture between Ekovest Bhd and Malaysian Resources Corp Bhd (MRCB), has finally been appointed the project delivery partner (PDP) of the RM2.2 billion Klang river rehabilitation and beautification project, known as the River of Life project.
The JV first obtained the letter of intent from the government for the job back in February.
According to the announcements made by both Ekovest and MRCB yesterday, the JV as the PDP will receive 1% of the estimated value of the project of RM2.2 billion, or RM22 million, as compensation for managing or coordinating the river rehabilitation and beautification projects over a three-year time period.
“The PDP will also enjoy monetary incentives with respect to the river rehabilitation and beautification works,” said Ekovest-MRCB JV in a press statement, without elaborating.
Notwithstanding the “monetary incentives”, the 1% fee or RM22 million may seem low compared with the usual contract margin in the construction industry that is at least 5% or more.
Nonetheless, according to a source familiar with the River of Life project, Ekovest-MRCB JV could still actually bid for the cleaning, rehabilitating and beautifying works for the project through a Swiss challenge exercise, which was what applied to the MMC-Gamuda JV in the MRT project.
This means the Ekovest-MRCB JV could still bid for the tenders and the authorities would call for other companies to submit a matching or better proposal to get the best quality at the lowest possible cost.
“The government has actually mentioned that if the JV can do the work at a cheaper rate than the other bidders, it would get the job. It doesn’t matter if it (the JV) was appointed the PDP, as the project does not belong to it.
“The River of Life project is led by a multi-agency task force under the purview of the Ministry of Federal Territories and Urban Wellbeing, hence the authorities will call for the tenders,” the source said.
In an interview with The Edge weekly recently, Datuk Bandar Kuala Lumpur Datuk Seri Ahmad Fuad Ismail, said as the PDP of the River of Life project, the party appointed (Ekovest-MRCB JV) should not bid for the other projects whose tenders were called by the government, so as to avoid any conflict of interest and to ensure transparency.
Nevertheless, the source said as the government would want to get the lowest price for the jobs, there is no reason why bids by Ekovest-MRCB JV should be disqualified or the company itself barred from competing only because it is the PDP.
He said the JV had been mulling over the project for quite a long time, so it is quite “familiar” with the classification and requirements of the project.
The River of Life project is an Entry Point Project identified in the Greater Kuala Lumpur National Key Economic Area under the government’s Economic Transformation Programme. It aims to transform the rivers running through the heart of Kuala Lumpur by undertaking river rehabilitation, beautification of riverbanks and river corridor development.
This article appeared in The Edge Financial Daily, December 7, 2011.
The JV first obtained the letter of intent from the government for the job back in February.
According to the announcements made by both Ekovest and MRCB yesterday, the JV as the PDP will receive 1% of the estimated value of the project of RM2.2 billion, or RM22 million, as compensation for managing or coordinating the river rehabilitation and beautification projects over a three-year time period.
“The PDP will also enjoy monetary incentives with respect to the river rehabilitation and beautification works,” said Ekovest-MRCB JV in a press statement, without elaborating.
Notwithstanding the “monetary incentives”, the 1% fee or RM22 million may seem low compared with the usual contract margin in the construction industry that is at least 5% or more.
Nonetheless, according to a source familiar with the River of Life project, Ekovest-MRCB JV could still actually bid for the cleaning, rehabilitating and beautifying works for the project through a Swiss challenge exercise, which was what applied to the MMC-Gamuda JV in the MRT project.
This means the Ekovest-MRCB JV could still bid for the tenders and the authorities would call for other companies to submit a matching or better proposal to get the best quality at the lowest possible cost.
“The government has actually mentioned that if the JV can do the work at a cheaper rate than the other bidders, it would get the job. It doesn’t matter if it (the JV) was appointed the PDP, as the project does not belong to it.
“The River of Life project is led by a multi-agency task force under the purview of the Ministry of Federal Territories and Urban Wellbeing, hence the authorities will call for the tenders,” the source said.
In an interview with The Edge weekly recently, Datuk Bandar Kuala Lumpur Datuk Seri Ahmad Fuad Ismail, said as the PDP of the River of Life project, the party appointed (Ekovest-MRCB JV) should not bid for the other projects whose tenders were called by the government, so as to avoid any conflict of interest and to ensure transparency.
Nevertheless, the source said as the government would want to get the lowest price for the jobs, there is no reason why bids by Ekovest-MRCB JV should be disqualified or the company itself barred from competing only because it is the PDP.
He said the JV had been mulling over the project for quite a long time, so it is quite “familiar” with the classification and requirements of the project.
The River of Life project is an Entry Point Project identified in the Greater Kuala Lumpur National Key Economic Area under the government’s Economic Transformation Programme. It aims to transform the rivers running through the heart of Kuala Lumpur by undertaking river rehabilitation, beautification of riverbanks and river corridor development.
This article appeared in The Edge Financial Daily, December 7, 2011.
