RM14b rail project postponed


  • Nation
  • Thursday, 11 Dec 2003

KUALA LUMPUR: The Government has decided to postpone construction of the RM14.5bil double-tracking job until the cost of implementing the massive rail project becomes affordable. 

“We need to spend within what has been budgeted and re-prioritise the new budget that is coming on,” said a senior government official yesterday. 

The decision to shelve the double-tracking project was made during the Cabinet meeting yesterday, and government officials said that the MMC-Gamuda consortium, which has been given the letter of award to build the railway tracks, would be offered the opportunity to resume construction once a decision to proceed with the project is made. 

It is also learnt that the Cabinet is waiting for a report from the Finance Ministry on the prioritisation of projects because a lot of the spending ceilings had been breached under the 8th Malaysia Plan and into the 9th Plan. 

Postponement of the massive project brings to a pause the controversy which started with the award of the job to the MMC-Gamuda consortium after Ircon International Ltd and Chinese Railway Engineering Corp (CREC) were given letters of intents to build the railway tracks. 

Ircon and CREC subsequently did not accept MMC-Gamuda’s offer to be sub-contractors for the project and that it would proceed to either undertake the works by itself or identify other companies as sub-contractors. 

On Dec 3, news broke that Ircon may be appointed a nominated sub-contractor to the project if the Government was amenable to the new price offer for the 70% work on the Ipoh-Padang Besar stretch of the multi-billion ringgit double-tracking rail project. 

The decision to suspend work on the project has come as a shock to the MMC-Gamuda consortium, which on Tuesday expressed confidence that the project would go ahead. 

Malaysia Mining Corp Bhd boss Tan Sri Syed Mokhtar Albukhary in an interview with a foreign newswire said construction of the railways was expected to start next month. 

Officials from MMC-Gamuda were surprised by the reports, saying that they had not officially heard of the Government’s decision to suspend construction of the project.  

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