In a significant development in Malaysian infrastructure, Transparency International Malaysia (TI-M) has called for stringent independent oversight of the Penang Light Rail Transit (LRT) project. This call comes in light of concerns over the direct tender process awarded to SRS Consortium Sdn Bhd, a subsidiary of Gamuda Bhd.
Muhammad Mohan, the president of TI-M, emphasized the necessity of third-party oversight to ensure the integrity of the 30km LRT line’s procurement process. Despite the project’s full funding by the federal government and the division into three contracts, the main line’s construction was uniquely awarded through a “single-sourcing request for proposal” mechanism. This method selects only one supplier, in this case, SRS Consortium, which also contributed to the state’s transport master plan.
“The necessity for independent experts to monitor the negotiations between MRT Corp and SRS Consortium is critical to prevent undue influence or corruption,” said Mohan. He stressed that any irregularities, like involvement of cronies or government officials, must be reported immediately to uphold transparency and fairness.
The project’s arrangement has sparked debate, especially since the remaining portions of the LRT—comprising a cross-channel line and turnkey systems with rolling stocks—will be competitively bid. This disparity in the tender process has raised questions about the fairness and transparency of the direct tender awarded to SRS Consortium.
Transport Minister Loke Siew Fook defended the decision, citing the consortium’s independent funding of initial studies, including technical, environmental, and social impact assessments, which justified the single-source RfP favoritism.
However, concerns extend beyond the procurement process. Economist Lim Mah Hui highlighted potential ethical and financial conflicts arising from SRS Consortium’s previous engagements, notably the Silicon Island reclamation project. The project, partially privatized in 2021, reportedly favored SRS Consortium and Gamuda, allowing them to secure substantial profits as the sole contractor and majority shareholder, with the state government holding a minor stake.
“By consolidating such significant public projects under one private entity, we risk giving undue advantage and control over public resources to Gamuda,” Lim argued, pointing out the potential for monopolistic benefits to the consortium at the expense of public interest.
These developments underscore the need for enhanced regulatory scrutiny and the implementation of robust oversight mechanisms. Independent auditing and transparent reporting are crucial to maintaining public trust and ensuring that such critical infrastructure projects serve the broader interests of society without succumbing to privatized gains. The ongoing discussions and decisions surrounding the Penang LRT project will likely set important precedents for how large-scale public projects are awarded and managed in Malaysia.
