PM Breaks Promise, Offers Masteel Bhd to Build Rail through Direct Negotiations


KUALA LUMPUR, July 15: Prime Minister, Datuk Seri Najib Razak has been labelled as someone who breaks promises when he offered the rail system construction project in Iskandar Malaysia to Malaysian Steel Works (Masteel) Bhd through direct negotiations.

The tender offer is valued at RM1 billion.

Najib allegedly failed to fulfil his promise as he had previously promised to implement the open tender system after the 13th General Election.

Petaling Jaya Utara Parliamentarian, Tony Pua in a press conference today said that choosing Masteel is also being questioned because they are inexperienced in rail construction because their main activity is manufacturing and supplying various types of steel products in Malaysia.

“The company, which only has achieved a net profit of RM24 million in 2002, has not been involved in construction and rail operation works.

“Is Masteel the best company to carry out the RM1 billion project with a government grant of only RM700 million?

“In fact, is there a need to privatise the project if the government has to finance 70 percent of the construction cost through granting a soft loan?” he asked.

He said that the government should explain the rationale to offer the project through direct negotiations, especially to a company which has no experience or sufficient capital funds.

Tony Pua explained that Masteel announced on May 31 through Bursa Malaysia that they attended a meeting with the Public Private Partnership Committee (UKAS) chaired by the Second Finance Minister, Datuk Ahmad Husni Hanazlan Hussain.

During the meeting, Masteel’s subsidiary company, Metropolitan Commuter Network (MCN) was given permission to finalise the RM700 million soft loan structure from the government to build a new rail system in Iskandar Malaysia, where this rail system will encompass 20 stations, including Kulai, Gelang Patah, Nusajaya, Johor Bahru and Masai.

MCN is a joint venture company where Masteel owns 60 percent while KUB Bhd, where Umno is a stakeholder, owns 40 percent.

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