KL offers India, China railway projects

KL offers India, China railway projects

KUALA LUMPUR (AP): Malaysia has offered India and China lucrative contracts for its domestic railway projects on condition that they buy Malaysian palm oil products, a news report said Saturday.

The Star daily quoted Transport Minister Ling Liong Sik as saying the contracts, worth several billion ringgit, involved the construction of a double track railway throughout Peninsular Malaysia.

The report didn't give further details of the offer or if India and China, two of Malaysia's biggest markets for oil palm, had accepted the offer.

Ling said the government proposed the arrangement to cushion the effects of the slowdown in the U.S. economy and to help the palm oil industry, which has been plagued by low prices for several months.

The U.S. is Malaysia's main trading partner. Strong U.S. demand for Malaysian exports of electronics goods and components helped lift it out of the 1997-98 Asian financial crisis.

Last week the government said its power stations will star burning palm oil rather than diesel fuel as part of efforts to reduce the country's stockpile and raise the commodity's flagging price.

The price of crude palm oil plummeted recently from a high of 2,500 ringgir a metric ton to 725 ringgit a metric ton -below the cost of production.

Malaysia is the world's largest exporter of palm oil, which is this Southeast Asian country's largest commodity. Output in 2001 is expected to total 11.2 million metric tons, above the 10.8 million tons produced in 2000.