Abdullah should resist great pressures in the next few days before the Cabinet meeting on Wednesday to proceed with the RM14.5 billion MMC-Gamuda contract for the double tracking rail project
by Lim Kit Siang
(Penang, Saturday): The Prime Minister, Datuk Seri Abdullah Ahmad Badawi should resist great pressures in the next few days before the Cabinet meeting on Wednesday to proceed with the RM14.5 billion MMC-Gamuda contract for the double tracking rail project when a “final decision” is to be taken by the Cabinet.
Abdullah should also make clear the rational behind the decision for the “indefinite postponement” of the single biggest privatization project in the country, whether it is to uphold the principles of fair, transparent and competitive privatization and to protect Malaysia’s relationship with China and India or because of a new development policy eschewing mega projects to focus on socio-economic projects in education, healthcare and agriculture and to prioritise grave problems which had surfaced in the country, such as the plunge in the Public Safety Index marked on the one hand by the double rise in crime rate and the fear of crime and the other by one of the highest incidence of road deaths from traffic accidents per thousand population in the world.
The Transport Minister, Datuk Seri Chan Kong Choy is not helping matters when he said yesterday that the there would be no need to revoke the letter of award to MMC-Gamuda JV which had been awarded the double tracking rail contract, as “we are not even talking about cancelling the project at this moment......we are only talking about a strong feeling in the Cabinet that it should be postponed for the time being”.
Malaysia may soon make history as the only country in the world which has two unrevoked Letters of Intent to Ircon Interntional Ltd (IRCON). and China Railways Engineering and Telecommunications (CRET), yet both had been by-passed, and an unrevoked Letter of Award to MMC-Gamuda for the country’s biggest infrastructure privatization project, yet “postponed indefinitely” – which is clearly a most extraordinary way of conducting business, government or otherwise!
In the past two days, over RM400 million had been wiped off the capitalization of MMC, which is 40 per cent controlled by Tan Sri Syed Mokhtar Albukhary. MMC’s capitalization lost more than RM360 million on Thursday when its share price plunged 11.8 per cent or 29 sen to RM2.17; while yesterday it fell another 3 sen to RM2.14.
If the MMC price falls another 13 sen below RM2.01 by December 31, Syed Mokhtar will have to face the consequences of the mandatory general offer for the rest of the MMC to the tune of more than RM1.3 billion.
In this connection, DAP calls on Abdullah to issue a report to explain how the combined bid from the contractors from India and China for the double tracking rail project shot up to RM40 billion when all the time in the public domain, the figures mentioned was in the region between RM12 billion to RM14 billion.
In the last media report on the comment by the former Transport Minister, Datuk Seri Dr. Ling Liong Sik on the double tracking rail project before his forced resignation from the Cabinet, the figure quoted in the report for the entire project was RM12 billion.
The New Straits Times report (28.5.2003) under the heading “Details on bids for double-tracking railway projects out soon” began with the lead “Transport Minister Datuk Seri Dr. Ling Liong Sik said today the Government will soon announce details on the bids for the double-tracking railway projects linking Ipoh and Padang Besar, and Seremban and Johore Baru” contained the following:
“Ircon, the state run engineering and construction firm, is set to undertake double-tracking and electrification works for the northern grid spanning 338.8 km, linking Ipoh to Padang Besar, pending confirmation.
“The parcel is estimated to be worth RM6 billion.
“Likewise, China Railway is set to work on the 297 km southern grid linking Seremban and Johor Baru, also valued at RM6 billion.”
It was most shocking when after Liong Sik’s resignation as Transport Minister, it was announced in August by the then Prime Minister, Tun Dr. Mahathir Mohamad that the contractors from India and China had submitted a quotation of RM42 billion – RM30 billion or more than three times higher than the oft-quoted figure of RM12 billion reported for the project in the Malaysian press in the past two years.
Malaysians are entitled to know the circumstances for the three-and-a-half-fold increase in the quoted price by the contractors from India and China for the double tracking rail project, and Liong Sik’s role in the process.
* Lim Kit Siang, DAP National Chairman