RM1b Iskandar rail job awarded to inexperienced steel firm, says Pua
(The Malay Mail) – Pua said the contract also includes a 37-year concession to MCN to operate the commuter system even though the company estimates to break even within 12 years.
DAP MP Tony Pua today questioned Putrajaya’s decision to award a steel manufacturer and an Umno-linked firm a RM1 billion contract to build the 100km intercity railway line between Iskandar Malaysia and Singapore.
The Petaling Jaya Utara MP noted that Metropolitan Commuter Network (MCN), the joint-venture firm tasked to construct and operate the railway system, has no experience in the railway construction industry.
Steel manufacturer Malaysia Steel Works (KL) Bhd (Masteel) holds a 60 per cent controlling stake in MCN while Umno-linked KUB Malaysia Bhd has 40 per cent.
“We would like to question the basis behind the government’s selection of Masteel for this rail project through direct negotiation. Why not conduct an open tender bid?” Pua (picture) asked in a statement.
Citing a June 17 report in The Edge Malaysia, Pua said Masteel CEO Datuk Seri Tai Hean Leng had revealed that MCN would invest some RM300 million to carry out the project while the remaining RM700 million would come in the form of a government “soft loan”.
Pua said the contract also includes a 37-year concession to MCN to operate the commuter system even though the company estimates to break even within 12 years.
The concession also includes the award of a 14.3ha plot of land in Kempas Johor where MCN will construct a depot and a commercial building, the lawmaker noted.
“Questions arise over the purpose of privatising this project when the government has to fork out 70 per cent of the construction cost through this soft loan,” Pua said.
“Furthermore, Masteel is not a firm that has any experience in the rail industry. Masteel’s core activity is in the manufacture and supply of steel in Malaysia.
“Is Masteel the best company to carry out this RM1 billion project with government aid of RM700 million?” he asked.
Pua demanded that Putrajaya explain its rationale behind awarding yet another big ticket project to an inexperienced firm and without going through open tender.
He pointed out that government performance management unit Pemandu had introduced the Government Transformation Programme (GTP) in 2009, promising to improve on transparency and accountability, weed out corruption and administrative wastage, particularly in the procurement of government projects.
“But up till today, we have only seen the government failing to walk the talk,” Pua said.
He reminded Prime Minister Datuk Seri Najib Razak of his many reform promises, asking if the embattled leader had merely been dishing out empty promises in order to secure his position in government during the just-concluded May 5 general election.
