India hopeful of winning Malay rail deal

By siliconindia   |   Tuesday, 02 December 2003, 20:30 IST
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NEW DELHI: Hopes are still on in India to win part of a multi-billion dollar Malaysian rail contract as promised, before it was cut out of the deal in favour of a politically well-connected local group. India's visiting Minister of State for Commerce and Industry, Satyabrata Mokherjee, told reporters he had been informed that the Malaysian cabinet was still considering the deal, which also originally involved China. Asked whether he was confident that India still had a chance of securing the contract, he replied: "I can’t say that but then we are hopeful. We have a very good track record and I don't see why we should not get part of the business." One of Asia's biggest infrastructure contracts, the double-tracking rail project forms part of an ambitious 5,600-kilometre trans-Asia link that runs from Kunming in China through Vietnam, Cambodia, Myanmar, Thailand and Malaysia to Singapore. It involves building a dual track and electrifying a 600-kilometre (372-mile) north-south rail line running the length of peninsular Malaysia. The project was originally promised to state-owned Indian Railway Construction Co. (IRCON) and China Railway under a government-to-government deal involving a barter trade of some eight million tonnes of palm oil worth 12 billion ringgit (3.16 billion dollars). However, Malaysia dropped the Indian and Chinese contractors despite signing letters of intent last year, citing overpriced bids of 42 billion ringgit, which were later, reduced to 24 billion. The job was then handed to politically well-connected infrastructure group Malaysia Mining Corp. (MMC) and its partner Gamuda Bhd. for 14.45 billion ringgit, just days before former premier Mahathir Mohamad retired on October 31. Both IRCON and China Railway have rejected offers by the local consortium to participate in the project as sub-contractors and Malaysia's Primary Industry Minister Lim Keng Yaik said he feared the two countries might cut palm oil imports in retaliation. Mokherjee said, however, that there would be no retaliation if India lost the deal. There was "no question about any backlash," he said. "It's for the government of Malaysia to decide and I'm sure they will choose the right party." Mokherjee was speaking on the sidelines of a Indian trade exhibition in Kuala Lumpur which was opened by new Prime Minister Abdullah Ahmad Badawi. Mokherjee said he had not discussed the issue with Abdullah but received his information that the deal was still under consideration from "a reliable source".

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