KUALA LUMPUR, Oct 26 — Finance Minister Lim Guan Eng said MMC-Gamuda has been re-awarded the MRT2 project in its entirety after the conglomerate slashed its proposed cost by RM8.82 billion.

This also includes the firm’s agreement to further increase the proposed cost reduction for the underground portion to RM3.6 billion, up from the original RM2.13 billion offer.

"This means that the construction cost (excluding interest during construction, land acquisition costs and other costs) of MRT2 has been successfully reduced by RM8.82 billion or 22.4 per cent from RM39.95 billion to RM30.53 billion.

"The MOF would like to extend our appreciation to the Prime Minister Tun Dr Mahathir Mohamad for his attention on this matter,” said Lim in a statement.

The negotiation occurred at the behest of the prime minister.

The Cabinet also agreed with MMC-Gamuda’s new offer and cost rationalisation exercise after a fresh round of talks that took place on October 22.

Previously, MMC-Gamuda had agreed to cut the cost for the above-ground part of the project by RM5.22 billion or 23 per cent, bringing it down to RM17.42 billion from RM22.64 billion which was accepted by the government.

However, its earlier offer to reduce cost by RM2.13 billion was rejected by the MOF. 

The ministry then decided to terminate the RM16.71 billion underground works contract and had plans to retender it.

"Today the Cabinet has decided to accept MMC-Gamuda’s new offer and the previous decision to terminate the underground works contract will be rescinded. MMC-Gamuda will continue to be the contractor for the underground works for a total cost of RM13.11 billion,” said Lim.