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.