Yesterday, I did a telephone interview with The Malaysian Insider =) It was regarding the two-bid system for the KL MRT. Anyways, read the text below - and then scroll further down to see my clarifications - as I believe, I was misquoted a little bit.
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Get the best with two-bid system for KL MRT, say builders
KUALA LUMPUR, Feb 17 — The Klang Valley Mass Rapid Transit (MRT) tenders should be done via the two-bid system to ensure that the best companies get to build the new heavy rail system, says Master Builders Association of Malaysia (MBAM) president Kwan Foh Kwai.
The two-bid system requires companies to submit tender documents in two parts — the first demonstrating their financial soundness and technical ability and the second part their offer price. Kwan said that the practice of the two-bid system was widespread in countries like Hong Kong and Singapore. “They want the best companies,” he told The Malaysian Insider.
The KL MRT system is touted as the most expensive construction project ever undertaken in the country and initial estimates have put the cost at about RM36 billion although officials from the Land Public Transport Commission have said that it is too early to disclose the actual cost.
Many public construction projects in the past were awarded via direct negotiations or limited tenders, often to politically linked companies which were perceived as less than deserving. Despite assurances from the prime minister that the MRT system will be awarded via open tenders, there is lingering perception that politically linked companies will continue to have an upper hand. Some members of the industry say that there are also downsides to the two-bid system.
Datuk Wong Foon Meng, chairman of Bina Puri Holdings Berhad, which won the bid to build part of the KL LRT extension said the two-bid system could potentially exclude a number of technically capable smaller companies that may not have the financial resources of larger companies.
“The MRT project requires huge funds,” he said. “Not many companies have both the financial resources and the technical expertise. If we separate the two, we can have more companies participating.”
Eric Yong, executive director of Crest Builder Holdings Berhad, said the two-bid system was good as many companies could “throw their prices” to be the cheapest even though their capabilities were in doubt. “If that happens, two-year projects can become four-year projects,” he said. “Everyone wants to have a cut.”
The tender for the KL MRT work is expected to be held in April, with the award expected in either May or June, and project kick-off in July.
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During the phone interview, I had mentioned that the two-bid system was very good. I totally agree with having a two-bid system - whereby companies submit a technical and financial bid together. This is highly essential as without the system, many companies, especially the smaller ones could "throw their prices" to be the cheapest when their capabilities are in doubt - after all, this is indeed a mega project and everyone wants to have a cut of it. In a situation like this, the project is bound to experience some major delays. There - just a slight play of words to clarify it further in case it sounded confusing.
Anyways, I am of the opinion that the two-bid system is the best system forward to get the best technically-sound and most competitive bid in the shortest/fastest possible time in order for the project to be rolled out. =)
