Malaysian PM says Indian, Chinese bids for rail project still

Malaysian PM says Indian, Chinese bids for rail project still high: reports

Agence France-Presse Kuala Lumpur

Prime Minister Mahathir Mohamad has urged contractors from India and China to lower their bids for a multibillion-dollar railway project in Malaysia, newspapers said on Sunday.

Mahathir said the double tracking railway project, part of an ambitious trans-Asia link from Singapore to China, remained open to them if they would accept a more reasonable value, the New Sunday Times reported.

"Their initial quotation was 42 billion ringgit (US$11 billion). When we said it was too high, they reduced it to 24 billion ringgit," the paper quoted the premier as saying.

Mahathir said the willingness to reduce the contract value by 43 percent was an indication they had overpriced it.

The project was promised to Indian Railway Construction Company (IRCON) and a consortium led by China Railway Engineering Corp.

It was part of the government-to-government initiative which includes a barter deal to increase exports of palmoil to India and China.

Mahathir said the government could not pursue the project if the cost were not lowered.

"Even at 24 billion ringgit, it is still too high. The people who build the project must make the price more reasonable," he was quoted as saying in the Sunday Star newspaper.

IRCON was to undertake the double tracking and electrification works for the northern region which spans 338.8 kilometers (212 miles) from Ipoh to Padang Besar, which border Thailand.

China Railway would build the 297 kilometer southern link from Seremban to Johor, which neighbors Singapore.

Mahathir said the government had conducted a study on the cost and found it could be reduced considerably.

Malaysia signed letters of intent with the Indian and Chinese firms last year.

The rail project has also attracted local bids, including one from the MMC-Gamuda Bhd consortium led by tycoon Syed Mokhtar Al- Bukhary.

The newspaper said Syed Mokhtar was ready to undertake the project for 14 billion ringgit.

Asked about that bid, Mahathir said: "If he can do it, why not."