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Saturday, May 17, 2008

RM3.45b rail deal

Indian Railway is expected to call for tenders soon to pick sub-contractors for the double-tracking project stretching from Seremban to Gemas

BETTER RELATIONS: Ong (left) and Prasad after the signing of the contract yesterday.

The award of the RM3.45 billion 100km electrified double-tracking railway from Seremban to Gemas in the southern part of Peninsular Malaysia to Indian Railway Construction Co (Ircon) has put to rest a major controversy that had threatened to sour relations between Malaysia and India.

In 2001, the government had awarded a US$3.5 billion (RM11.4 billion) double-tracking project to Ircon, India's national railway company, but withdrew the contract two years later without explanation.

Last year, Malaysia invited Ircon to re-submit its bid, leading to the award of the Seremban-Gemas portion in December.

"I'm happy that relations between India and Malaysia are growing in a comprehensive manner and trends are most positive," India's railway minister Lalu Prasad said at the signing of the contract between the government and Ircon in Putrajaya yesterday.

Prasad said that bilateral trade between Malaysia and India grew 24 per cent to US$8.1 billion (RM26.3 billion) last year, adding that Malaysian firms had been awarded US$6 billion (RM19.5 billion) worth of construction projects in India.

"There will be more opportunities for Malaysian firms in India, especially in infrastructure construction and railway development," he said.

Meanwhile, an Indian official, who declined to be named, suggested that India's idea of building a monorail in Patna, Bihar, which may exceed RM1 billion, could be undertaken jointly with a Malaysian firm, citing Scomi Group Bhd.

"The idea has been presented to the Malaysian government in a meeting held on Thursday. Ircon is now doing a study on the local monorail model to see if it's feasible in complementing India's other modes of transportation," the official told Business Times.

Malaysia's design-and-build double-tracking contract, which will be fully funded by the government, will be implemented in four years.

It will cover 34 river bridges, 27 road bridges, 107 culverts, two viaducts of 1.25km and 0.6km lengths and an 8km tunnel.

Ircon will build the first stretch from Seremban to Sg Gadut in three years, and then from Sg Gadut to Gemas, finishing the lines by July 2010.

The project will benefit Keretapi Tanah Melayu Bhd as it will be able to extend its commuter services to Gemas instead of making its last stop in Seremban.

Ministry of Transport finance secretary Datuk Tan Kiong Han said that payments to Ircon will be made progressively, adding that the government had issued two payments since the company started works on January 15.

It is learnt that IJM Corp Bhd is the main player for the railway job and that Ircon will call for tenders soon to appoint sub-contractors.

By New Straits Times (by Sharen Kaur)

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