Is the RM14.5 billion  electrified double tracking rail project the first test of the mettle of Abdullah as Prime Minister for fairness and  transparency to overrule a  decision taken by Mahathir?

Media Statement
by Lim Kit Siang

(Petaling JayaFriday): With the award of the RM14.5 billion electrified double tracking rail project, the country’s single largest privatized construction project, to latecomer Malaysia  Mining Corporation Bhd -Gamuda consortium (MMC-Gamuda JV) threatening to become a full-blown diplomatic crisis between Malaysia on the one hand and India and China on the other, will this be the first test of the mettle of Datuk Seri Abdullah Ahmad Badawi as the fifth Prime Minister for fairness and transparency to overrule  a decision taken by his predecessor, Datuk Seri Dr. Mahathir Mohamad? 

After the presentation of the Eighth Malaysia Plan Mid-Term Review in Parliament yesterday, Mahathir told a media conference that the government could not offer the multi-billion ringgit double tracking rail project to foreigners, who quoted a higher price, when there were locals willing to do it at a lower price. 

Asked to comment that the Indian government has expressed displeasure over the matter, Mahathir said the Indian government could still make a bid provided that they lower their price to the level that the local contractors were willing to undertake the project. 

On surface, this is a  reasonable, justifiable and acceptable ground  for preferring the bid of MMC-Gamuda JV as it had put in the lowest bid of RM14.45 billion, as compared to Indian Railway’s Ircon International Ltd. with DRB-Hicom/Emrail to handle the northern stretch from Ipoh to Padang Besar and China Railway Engineering Corp (CRET) with DRB-Hicom Hikmat Asia to handle the southern stretch of 287.5 km from Seremban to Johore Bahru. 

It has been reported that the Indian and Chinese-led consortia’s initial combined proposed price for the project was RM42 billion, but this amount was halved to about RM20 billion after repeated negotiations. 

The public interest questions are:

  • Whether the Indian and Chinese-led consortia were given the opportunity  to match the local bid of RM14.5 billion  bearing in mind that Malaysia had awarded letters of intent to the Indian and Chinese contractors last year for the project as part of government-to-government (G2G) transactions.
  • Whether the last-minute rush to issue the Letter of Award of the project to MMC-Gamuda and to cut out any involvement of the Indian and Chinese consortia, as evident  by the shot-gun announcement by Gamuda to KLSE yesterday that Ircon and CRET have turned down the offer to be the sub-contractors for the project, were to present a fait accompli to Abdullah when he is sworn as Prime Minister, although Abdullah  had been approached by the Indian High Commissioner Veena Sikiri the previous week and had promised to look into the matter?

Malaysia is currently  heading into stormy international waters and there can be  no reason why  the country should be  provoking  new diplomatic furores with more countries such as India and China over the  mishandling of G2G undertakings involving the award of the  mega double-tracking rail project.

For a start, the government should table a Ministerial statement in Parliament on Monday to present the facts and particulars leading to the present state of play in the award of the electrified double-tracking rail project, including the circumstances leading to the sidelining of the G2G undertakings with India and China and the letters of intent to  the Indian and Chinese consortia.


* Lim Kit Siang, DAP National Chairman