Renegotiate the North-South double track railway project with India and China in the interest of maintaining good relations with the two countries

Dr Chen Man Hin

(Seremban, Sunday): The construction of the N-S double track railway project was initiated on a government to government (G2G) basis, between Malaysia and   China/India.

CIRCON was the Indian contractor and CREC the contractor for China. Negotiations were conducted and had been going on for some months, and the last tender offer was 20 billion ringgits.

Then out the blue, it was announced that the double railway contract was awarded to MMC-Gamuda joint venture (JV) with offered RM14.5 billion

Tun DR Mahathir  explained that JV was awarded the contract because it was the lowest tender. The difference in value between the two tenders was RM5.5 billion.  For these few billions, the government is putting at risk the good relationship between Malaysia and China-India.

The sudden change of the G2G (government to government )  arrangement with the award to a third party will create misunderstanding and put a strain on international relations. Already, the press in India are up at arms over the issue.

The government cannot disregard the fact that both China and India are the largest buyers of palm oil from Malaysia, and this is no small factor in the cause for the high palm oil prices which is helping the economy to recover faster and boosting the income of rural folks.

The government must also keep in mind that China and India are fast becoming Asia s economic giants, with China s economy slated to overtake Japan in 5 years time. Good relationship with them will open their markets to Malaysia s exporting industries. Not to mention other benefits like tourism.

Favouring MMC-Gamuda a local consortium might  look patriotic, but is it? It would only benefit a few individuals. Weigh this against the obvious advantages of a booming trade with China/Inda  to the national economy and the rural masses. The government must revert back to the G2G arrangement.

The question of  railway construction expertise is another factor.  We know India and China have considerable experience in this field, because they have built and maintained large national railway systems in their countries.

Has MMC-Gamuda that kind of expertise?  The N-S double track railway is an important segment of the trans-Asean network, and it is vital that the construction is done by the experts, and not by a hastily gathered consortium without any engineeering experience on railways.

Lastly, it is vital at this stage for Malaysia to send the message that it is keen to maintain good relations with all countries, and do business with them. Relationship with the West is already strained. The government cannot afford to do anything untoward which will undermine relationship with China and India especially  when they soon  will be the top economies in Asia

The DAP calls upon the new prime minister,  Datuk Abdullah Badawi to revert back to the G2G arrangement and renegotiate to reach a settlement.


* Dr Chen Man Hin,  DAP life advisor