Putrajaya contracts Gemas-JB double-track to Chinese firm

By Jahabar Sadiq
Editor

December 27, 2011

A worker checks train tracks near a railway station in Yingtan, Jiangxi province March 10, 2008. — Reuters pic

KUALA LUMPUR, Dec 27 — Putrajaya has agreed to award the Chinese Road and Bridge Corporation (CRBC) a multi-billion ringgit contract to build the 197-km Gemas-Johor Baru electrified double tracking project (EDTP), instead of front-runner China Railway Construction Corporation (CRCC), sources say.

The Malaysian Insider understands the project is worth between RM7 and RM8 billion, after it was put under a mid-term review in the Ninth Malaysia Plan. The Gemas-Johor Baru sector would be the final package for the EDTP, with the other sectors being the Ipoh-Padang Besar and Seremban-Gemas lines.

“Putrajaya has decided on China Road and Bridge Corporation after some last-minute lobbying,” a source told The Malaysian Insider.

Another source said the award could be a wrinkle in Putrajaya-Beijing ties as only CRCC is authorised to tender for rail-related projects abroad. “The decision has been made and will be announced very soon,” the source disclosed.

Putrajaya and Beijing maintain very good political and business ties, with China taking palm oil and other commodities apart from a flow of goods being traded under the Asean-China Free Trade Agreement (FTA). However, the Penang Second Bridge project has not drawn down a US$800 million soft loan from Beijing while Putrajaya has also rejected a Chinese firm’s US$1 billion (RM3.1 billion) redevelopment bid for the Pudu Jail land.

But the Gemas-Johor Baru EDTP has always been seen as a project for Chinese companies, the sources said.

The project includes building nearly 200km of parallel railway tracks, including stations, depots, halts, yards and bridges and cover systems such as electrification, signalling and communications. This includes a realignment between Pulau Sebang, Melaka and the Gemas section.

Transport Minister Datuk Seri Kong Cho Ha said in July that the Gemas-Johor Baru stretch was already in the final stage of design but declined to state if the tender would be open to foreign parties when it is completed by end of the year.

He said the EDTP in the northern section was slated for completion by end-2013 and the line to Johor by 2016.

There has always been great interest in Malaysia’s double-tracking project as it was part of a larger Trans-Asian rail link between Singapore to China.

On May 2009, Global Rail Sdn Bhd, a relatively small contractor and its Chinese partner, China Infraglobe, submitted a proposal to Putrajaya to build and upgrade tracks from Gemas to Johor Baru at a cost of RM5 billion. The Business Times reported that the project will be on a private finance initiative (PFI) basis and the plan submitted to the Finance Ministry later in June 2009 was conditional upon signing over mineral rights in Johor State.

Kong said last January that the government hoped to appoint the contractor for the project this year and Malaysia is still in the midst of talking with CRCC but nothing had been confirmed yet. He also said two consultants had been appointed, a design consultant and an independent checker, to monitor the project..