North-south rail job to cost less

THE three consortiums appointed to build the various stretches of the north-south railway double-tracking project may lower the final cost of the work from the original price tag of RM23bil as they prepare their final proposals for submission to the government, said DRB-HICOM Bhd group chairman Tan Sri Mohd Saleh Sulong.

“As with other work for the government, the final contracts are subject to further negotiations,” Saleh told the media after announcing the DRB-HICOM group’s appointment as the exclusive sales agent for the Russian BE-200 amphibious aircraft by JSC Scientific Production Corp Irkut.

He said the consortiums had to submit their final proposals for the rail project after receiving letters of intent from the government recently.

He declined, however, to elaborate on the initial prices submitted by the consortiums or the timeframe for submission of their final proposals to the government.

The cost of the project was the subject of a controversy recently following reports that one of the members of the consortiums, Malaysia Mining Corp Bhd (MMC), said it could build the entire stretch of the railway track for RM14.5bil compared with the original price tag of RM23bil believed to have been submitted by the consortiums.

DRB-HICOM is involved in all the three consortiums appointed to undertake construction of the entire railway double tracking project.

The first Rawang-Ipoh stretch of the project is currently under construction by a consortium led by DRB-HICOM.

India-based Ircon International Ltd heads the consortium that will build the 338km Ipoh-Padang Besar stretch, while the China Railway, Engineering and Telecom consortium will undertake the construction of the 298km Seremban-Johor Baru stretch. DRB-HICOM is also a member of both these consortiums.

The Chinese and Indian parties were invited to take part in the project as part of a government-to-government counter trade agreement involving palm oil.

Analysts said the various parts of the project were likely to be divided into local and foreign components and led by the respective local and foreign parties. A DRB-HICOM official told StarBiz the group expected to be a significant member of the consortiums when each had finalised the portion of the project in which they would be involved.

Separately, Saleh said the DRB-HICOM group’s car marketing arm, Edaran Otomobil Nasional Bhd (EON), was expected to seal the long-delayed distributorship agreement with Proton soon.

“There was a slight delay from our original target to sign the agreement by June 30, but we hope to sign the agreement soon,” Saleh said.

He said there was no breakdown in the negotiations with Proton but offered no explanation for the delay.

Saleh said EON was confident that the matter could be resolved soon and insisted that there would be no change to the contents of the agreement as both sides had agreed to stick to the “spirit” of the memorandum of agreement signed earlier.

The Star Online > Business

Wednesday, August 06, 2003