HindustanTimes.com

Saturday, August 23, 2003

India, China rail project bids too high: Malaysia

Reuters
Kuala Lumpur, August 23

Malaysia said on Saturday it wants bids from China and India lowered further
before awarding them contracts for a multibillion-dollar rail project, which
is part of a trans-Asia link from Singapore to China.

Prime Minister Mahathir Mohamad told reporters the foreign consortia had
overquoted from the outset.

"We cannot pay at a higher cost something that we can get at a lower cost.
We are still open to them but they must reduce their costs," Mahathir told
reporters.

The government, which has received a lower quote from a local consortium,
has budgeted for 17 billion ringgit ($4.47 billion).

Reuters reported earlier this week that the foreign consortia had dropped
their price to 20 billion ringgit.

Of this, China Railway Engineering Corp (CREC) and its local partners have
bid about five billion ringgit for the southern section.

Indian Railway Construction Company (IRCON) and its partners have bid nine
billion ringgit for the northern section.

Japan's Mitsui & Co, the main signalling contractor, has lowered its price
to around six billion.

Mahathir made no mention of the latest 20 billion ringgit figure, but, asked
about the Chinese and Indian consortia, said they had overpriced.

"It's a very costly project. The initial quotation was 42 billion ringgit
and then when we said it can be too high and all that, they reduced it to 24
billion ringgit, which means that they must have overpriced the costs so
high," Mahathir said.

Malaysia signed letters of intent with the Indian and Chinese companies last
year, inviting them to draw up proposals for separate parts of the project,
but a far lower bid from a local consortia threw the competition wide open.

Local tycoon Syed Mokhtar Albukhary's flagship firm Malaysia Mining Corp Bhd
(MMC) and infrastructure company Gamuda Bhd submitted a joint bid worth 14.5
billion ringgit.

"Well, if he can do it, why not?" Mahathir said when asked about the
businessman's proposal.

© Hindustan Times Ltd. 2003.
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