No govt interference, says Loke as Pestech back in aerotrain project

January 20, 2024

No govt interference, says Loke as Pestech back in aerotrain project

KLANG: Transport minister Loke Siew Fook has dismissed speculation over Pestech Technology Sdn Bhd’s involvement in the Kuala Lumpur International Airport (KLIA) aerotrain replacement project.

Pestech Technology, a wholly-owned subsidiary of Pestech International Bhd, had a RM742.95 million contract for the aerotrain project terminated by MAHB last year due to prolonged delays in its delivery.

On Wednesday, MAHB signed an agreement to complete the project with Alstom Transport Systems (Malaysia) Sdn Bhd and a joint venture involving IJM Construction Sdn Bhd and Pestech Technology.

This led to netizens questioning why Pestech Technology was back in the picture and whether Loke was involved in awarding the contract.

At a press conference, Loke said the aerotrain project was not a government project but under Malaysia Airports Holdings Bhd (MAHB).

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“Although they report to us, in terms of awarding the contract, it is purely under the board of directors of MAHB,” the minister said.

He added that queries on the project’s increased cost of about 15% should be directed to MAHB.

“As far as cost is concerned, I think MAHB can answer that,” he said.

Pestech Technology was initially appointed as the design and build contractor for the KLIA Aerotrain replacement programme on Dec 14, 2021 through an open tender process.

MAHB later cited the company’s “non-performance, compromising significant project milestones and risking delays to deliver the project within the required deadline” in terminating the previous contract.

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The 25-year-old aerotrain service has been suspended indefinitely since March 2023, after drawing public criticism due to constant breakdowns. The last disruption in March that year saw 114 passengers being stranded midway between the main KLIA terminal and the international departure terminal.

Under the new agreement, Alstom, the new aerotrain’s original equipment manufacturer, would serve as the project coordination lead and coordinate the project’s recommencement.

They are expected to deliver three new trains and two lines by the first quarter of 2025.

MAHB said Alstom had a successful track record in similar ventures in other airports in the United States, United Arab Emirates and Germany, among others.

It added that Alstom chose to work with IJM Construction and Pestech Technology as it was given the freedom to select its partners for any work outside its scope.

Yesterday, New Straits Times quoted RHB Research as saying the new contract for the remaining work could be 30% higher than the value at the time when Pestech Technology’s contract was terminated.

However, the news outlet later quoted a MAHB spokesman as saying the increase in costs will be capped at 15%.

This increase was attributed to interest holding costs, foreign exchange considerations, remobilisation expenses, and project coordination fees to Alstom.