BREAKING NEWS

Masteel surprised by news of Iskandar rail

 

Malaysia Steel Works (KL) (Masteel) is apparently caught by surprise by a news report today which quoted unnamed sources saying that its proposed intra-city rail line project in Iskandar Malaysia, worth RM1 billion, is set to be scrapped. When contacted by KiniBiz, Masteel managing director and chief executive officer Tai Hean Leng said that the company is checking with all relevant government agencies to verify the basis of the article, implying that Masteel has not received any indication on the matter from relevant any government entity.

A local newspaper reported today that Masteel’s proposed intra-city rail line project in Iskandar Malaysia via its 60% owned Metropolitan Commuter Network (MCN) was not approved by the Ministry of Transport and Minister of Finance Inc, quoting unnamed sources.

However, Tai had previously told KiniBiz that the Ministry of Transport (MoT) had already approved the project, while green light from the Land Public Transport Commission (SPAD) is pending. “Masteel stands by all its previous announcements on the status of its Iskandar commuter rail project,” Tai told KiniBiz today in response to the unnamed source’s claim that MoT did not approve the project.

The news story reported that the project is being scrapped because it is not part of the government’s railway infrastructure development plan in Malaysia. “It does not make sense to have too many railway lines in Johor. It will be congested.”

“We also have the Gemas-Johor Baru double-tracking project coming up,” the source was quoted as saying.

The unnamed source also added that the government wants to focus on the high-speed rail system linking Kuala Lumpur and Singapore which will likely stop in Iskandar Malaysia as well as on the rapid transit system from Johor Baru to Woodlands,Singapore.

MCN’s proposed intra-city rail line project has attracted controversy as questions arose on why the project was awarded via direct tender in contrast to prime minister Najib Abdul Razak’s previous promise for more transparency in the form of open tenders.

In addition, critics also questioned the need to privatise the project since the government is coughing up 70% of the project cost. In response, Masteel’s Tai defended the project, saying that other bidders are not prevented from submitting their bids for it and adding that the Iskandar rail project was slated to be a private sector initiative as opposed to a government-driven project.

“As such (Masteel) was not awarded the contract by the government,” Tai told KiniBiz last month.

However, critics have shot back, saying that in view of Masteel’s response, direct negotiations must cease. “Prime Minister, Najib Abdul Razak himself must insist that the project be tendered openly and competitively,” said lawmaker Tony Pua in a statement.

The project would have seen the government providing MCN with RM700 milion in soft loan while

MCN will foot the remaining RM300 million in a 37-year concession. According to Masteel’s calculations, it would recoup its initial investment within 12 to 13 years and enjoy a return on investment (ROI) rate of 10% per annum for the remainer of the concession period.

First mooted in 2009, the rail plan would have seen 30km of double-track railway stretching from Johor Baru city centre to Kulai as well as a 50km link between Pasir Gudang and Port of Tanjung Pelepas using the existing alignment, and would have been developed in a way similar to Syarikat Prasarana Negara’s light rail transit concept in the Klang Valley.

Masteel ended the morning session at 95.5 sen after tumbling 2.5 sen from its opening price.

Source : http://www.kinibiz.com

 

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