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Upgrade on hold

01 Feb 2004

ON DECEMBER 17 Malaysia's new Prime Minister Ahmad Abdullah Badawi announced that the 14·5bn ringgit project to double track and electrify KTMB's north-south trunk line had been postponed.

The plan called for upgrading of the 339 km from Ipoh northwards to Padang Besar on the Thai border and the 297 km between Seremban and Johor Bahru in the south. With Malaysia facing a budget deficit, Badawi explained that the government had decided to pursue development plans with prudence and 'to prioritise projects in favour of those having a significant direct impact on quality of life'.

Be that as it may, the project had aroused considerable controversy. An agreement for Indian and Chinese companies to carry out the work as part of a palm oil barter deal was reached in 2001. China Railway Engineering Co was picked on the Seremban - Johor Bahru section, while Ircon was chosen for Ipoh - Padang Besar. But the prices came in too high for the Malaysians, despite a revised lower offer.

The government then announced on October 22 that the work had been awarded to a local joint venture of Malaysian Mining Corp and Gamuda Bhd. Loud protests could be heard from New Delhi, and on December 2, after allegations of cronyism, Malaysia indicated it was renegotiating the deal. The scheme is thought to be the most expensive single project planned in Malaysia, and the government will need a lot of convincing before it is put back on the agenda.