Although the deal was awarded to SRS Consortium Sdn Bhd through the single-sourcing method, the ministry said this did not mean the contract was awarded without due diligence.
It said that after Putrajaya took over the project from the state government in 2024 and appointed MRT Corp as the developer, the public transport operator conducted various assessments to review the track alignment, work scope, and estimated cost.
“As part of this process, MRT Corp also obtained independent cost assessments from two quantity surveying firms,” it said in a statement.
“Following the Cabinet’s decision to take over the project, the contract negotiation process began in April 2024 and lasted for approximately eight months
“Throughout this period, MRT Corp conducted comprehensive commercial, technical, and cost assessments to ensure the project reached optimal value,” it said, in response to questions about awarding the Package 1 contract to SRS.
It also said the contract was subjected to a value management exercise in April last year, resulting in a final contract amount of RM7.93 billion.
The transport ministry also said SRS was awarded the package’s contract because it was involved in the project even when it was still under the Penang government.
It pointed out that before Putrajaya took over the project, the state government had appointed SRS as the project delivery partner for the Penang Transport Master Plan through an open tender held in October 2015.
SRS then independently funded the project’s initial technical studies and designs, including environmental and social impact assessments.
“The decision to use the single-source mechanism was made at the Penang government’s request, to prevent legal disputes since SRS was appointed the delivery partner for the Penang Transport Master Plan.”
The ministry maintained that the single-source mechanism was not the same as direct negotiations as the latter did not include any competitive process.
“For Package 2 and 3 of this project, an open tender process was made mandatory, reflecting the government’s commitment to transparency and healthy competition in public procurement,” it added.
The Mutiara Line LRT project remains on track for its targeted commencement of operations in 2031.
A total of 22 stations will be built, including one at Penang Sentral in Butterworth, which will be connected to Macallum Street on the island via a 6km cross-strait bridge.