Letters of intent not binding, says Chan

  • Nation
  • Saturday, 25 Oct 2003


PETALING JAYA: Two consortiums, headed by Indian Railway Construction Company (Ircon) and China Railway Engineering Corporation (CREC), were only issued letters of intent, which were not binding on the Malaysian Government. 

Commenting on the award of the RM14.4bil North-South railway double tracking project to Malaysia Mining Corporation Bhd (MMC) and Gamuda Bhd, Transport Minister Datuk Seri Chan Kong Choy said at a press conference yesterday: “Letters of intent are not binding.”  

It was reported that Ircon, together with DRB-Hicom Bhd and Emrail Sdn Bhd, were earlier issued with letters of intent as main contractor for the 329km north portion of the project between Ipoh and Padang Besar. 

A consortium comprising CREC, DRB-Hicom and Hikmat Asia Sdn Bhd, was also reported to have been issued with similar letters to handle the 299km south portion between Seremban and Johor Baru. 

On other developments that occurred after the announcement that MMC-Gamuda was awarded the project, Chan declined to comment.  

Following the award, Keretapi Trans Asia Bhd was reported to be considering legal action against Gamuda for an alleged breach of an earlier joint-venture agreement to handle a portion of the project. 

Chan also refused to say how the appointment of MMC-Gamuda would affect the barter trade agreements between Malaysia, India and China. 

Under the agreements, the Indian and Chinese governments would have received palm oil as payment for the jobs carried out by Ircon and CREC in the project. 

On whether Malaysia would have to reimburse Ircon and CREC for work done for the project, Chan said: “I don’t think the question of reimbursement arises.” 

Chan also pointed out that Malaysia would be donating 106km of used railway tracks to Cambodia.  

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