It’s official. The government has cancelled the contract for the second phase of the Klang Valley Double Track (KVDT) rail upgrade project, with transport minister Anthony Loke citing the RM5.2 billion cost to be excessively high.

According to The Star, Loke said the cancellation was also due to the manner in which the project was awarded – through direct negotiation. The project was initially awarded to Dhaya Maju LTAT Sdn Bhd by the previous govenment on April 4, just days before Parliament was dissolved, Loke said.

“A new tender will be called at the end of the year. It will be an open process and we aim to award the contract by the first half of next year,” he said, adding that the Cabinet decided on the cancellation at its weekly meeting yesterday (September 19).

So far, no payment had been made to the contractor yet, although about three percent of works had been carried out, Loke explained. “They are in the process of claiming the payment for the work done and possibly for compensation.”

To recap, the project involves 110 km of railway tracks that stretch from Kuala Lumpur to Klang, Salak South to Seremban and Simpang Port Klang to Port Klang. The whole project was to be implemented in phases over seven years and includes infrastructural and system upgrades to ensure safe and reliable train services.

From a technical viewpoint, KTMB said the second phase needs to be implemented because the (current) track is unsustainable. Financially however, the government, while acknowledging the need to upgrade the track, has no means to support it, although it is seeking a better deal.