Kuala Lumpur, Aug 24: Prime Minister Mahathir Mohamad has urged Indian and Chinese companies to lower their bids for a multi-billion dollar Malaysian rail project. The double tracking railway project, which is part of an ambitious trans-Asia link from Singapore to China, will remain open to the companies if they accept a more reasonable value, Mahathir was quoted as saying by the New Sunday Times.
State-owned Indian Railway Construction Co (IRCON) and China Railway Engineering Corp have submitted bids for the northern and southern stretches of the project.
"Their initial quotation was 42 billion ringgit (11 billion dollars). When we said it was too high, they reduced it to 24 billion ringgit (6.32 billion dollars)," Mahathir said.
Mahathir said the reduction in the contract value was an indication that it was overpriced.
"Even at 24 billion ringgit, it is still too high. The people who build the project must make the price more reasonable," the premier was quoted as saying by the Sunday Star newspaper.
However, industry sources told that bids have been lowered further to a combined 20.5 billion ringgit (us$5.40 billion).
The project is part of a government-to-government initiative which includes a better deal to increase exports of palm oil to India and China.
The two companies were bidding separately and each is required to give up close to a third of their project to Malaysian companies. Bureau Report