Gemas-JB rail job winner to emerge in March

The winner for the contract to build the Gemas-Johor
Baru electrified double-track railway line will only be known in March,
government sources said.




Three Chinese companies were earlier shortlisted for the RM8 billion
project known as the Gemas-Johor Baru Electrified Double Tracking
Project (EDTP).

They are China Railway Engineering Co (CREC),
China Railway Construction Co (CRCC) and China Communication
Construction Co (CCCC). The three are subsidiaries of China’s Ministry
of Railway.

The Ministry of Transport said recently the rail link
was still in the design process and its minister, Datuk Seri Kong Cho
Ha said he was not aware of any contract being awarded yet despite
unconfirmed news saying the government has decided winner of the tender.

The
Gemas-Johor Baru project includes the building of 197km of parallel
railway tracks, stations, depots, halts, yards and bridges and covers
systems such as electrification, signalling and communications.

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The rail project would be the final link in the EDTP with the other
links being the Ipoh-Padang Besar and Seremban-Gemas railway line.

Beijing-based
CREC was given a letter of intent (LOI) for the southern sector by the
Malaysian government on a G-to-G deal in 2004, in exchange of palm oil
and offshore financing by the Chinese government.

India’s Indian Railway (Ircon) was given the LOI for the northern sector from Ipoh to Padang Besar.

However, because of the economic crisis in 2007, the Malaysian government withdrew both the LOIs.

The
government later awarded the Ipoh to Padang Besar contract to
Gamuda-MMC JV at RM12.45 billion through a direct negotiation basis.

In 2008, Ircon was given the southern sector from Seremban to Gemas for RM3.45 billion.

During
several recent visits by Prime Minister Datuk Seri Najib Razak to
China, he had declared that the sector between Gemas and Johor Baru will
be given to a Chinese company.

As Malaysia was no longer
entitled to Chinese government soft loan financing, the Malaysian
government decided to award the contract based on restricted closed
invited tender.

According to a source, CREC, CRCC and CCCC were
recommended to be given approval to participate in the invited tender,
which is expected to be called in this month.

It was also
suggested that based on bilateral relations with China, one of the
Chinese companies will be selected for direct negotiation based on its
local company participation.

"CREC would be the favourite to
win as it is the initial party appointed by China and has spent some
RM10 million during 2004 before the project was cancelled.

"The key local company involved will be the main selection criterion by the government," the source said.