I refer to malaysiakini 's ' PM says Indian and Chinese bids for rail job still high ' .

One would have assumed that Malaysian politicians, policy makers, media groups and corporate business interests and their cronies would have learnt some rather bitter but useful lessons in international diplomacy after their recent stand-off with India where local police were accused of using high-handed tactics in detaining a large group of Indian nationals working here as IT consultants.

That incident was well-publicised internationally, resulting in India virtually ticking off Malaysian ministers during their official visits. An Indian minister's visit to Malaysia was hastily cancelled and the Indian hockey team withdrew from an international hockey meet here.

Long-term economic and bilateral relationships would have been severely strained and dented if the Malaysian government had failed to apologise as quickly as it did.

But Malaysian politicians forget rather quickly their past sins, and thus, we seem to have come full circle with the statement by Prime Minister Dr Mahathir Mohamad that the double-tracking railway project, part of an ambitious trans-Asia link from Singapore to China, "remains open to both India and China if they would accept a more reasonable value".

According to Dr Mahathir, both India and China's initial quotation was RM42 billion, but was later reduced it to RM24 billion following complaints that the price was too high. He was further quoted as saying that their (India and China's) willingness to reduce the contract value by 43 percent "was an indication they had overpriced it".

This shocking revelation implies that both India and China are crooks! But where are the facts?

The memorandum of understanding for this mega-project was signed in May 2001. India was reportedly set to get US$2.63 billion for laying double tracks for a stretch of 338.8km from Ipoh to Padang Besar, called the northern grid, while US$2.1 billion would go to China if it gets to build the southern grid's 297km from Seremban to Johor Baru.

But, the problem is, despite the MoUs being signed with India's government-owned International (Indian) Railway Construction Co (IRCON) and China Railway Engineering Corp (CREC), the matter was still on the negotiating table.

So after two years and with no end in sight, and 'new complications' arising after reports in the Malaysian media, the projects will be undertaken by a Malaysian group strongly connected to Malaysia's political elite.

To add to the confusion, ill-advised comments pertaining to the project came from a junior politician, appointed to a hot treasury seat and cabinet position, which sent 'shockwaves' to senior Chinese and Indian policy makers associated with the project.

I must add that 'diplomatic niceties' have been ignored when comments were unilaterally made, without first advising either New Dehli or Beijing.

Among the media statements was one, which appeared in the Malay Mail on July 12, headlined 'Bidding war for rail job hots up'. But senior policy makers associated with the project in India and China have asked: "What bidding war?"

Ironically, all these comments have also come, after statements made at a recent International Transport Conference in Kuala Lumpur by former transport minister Ling Liong Sik and the managing director of KTMB reiterating that the letter of award would be given to both IRCON and CREC "very soon".

For the record, not a single metre of track has been laid in Malaysia for the high-speed Trans-Asia Railway, although the initial work by a Malaysian company involved for the Rawang Ipoh stretch, has run into severe problems.

But, if this project fails to take off while Malaysia haggles over the price of palm oil, both India and China could say 'enough is enough' and pull out, creating another irreparable diplomatic situation for incoming premier, Abdullah Ahmad Badawi.

It could leave retiring Dr Mahathir in an embarrassed position internationally and we can expect trade repercussions from India and China, with more than a dozen Malaysian commercial operations and landing rights in India being seriously jeopardised.

Interestingly, while Malaysians indulge in political adventures, Thailand and Vietnam are going ahead with the project, with Vietnam laying tracks for the Vietnam-Cambodia sector rather fast. The irony however is that Malaysia, as the secretariat for the entire project, has done nothing concrete except politicise the matter.

The matter is further made difficult when the name of Malaysia's new corporate 'hotshot', Syed Mokhtar Al-Bukhary,, is mentioned in this news reports emerging from Putrajaya.

This is not new as in the past, names like Tajudin and Halim have been linked with other multi-billion ringgit government awards. Some have been embroiled in controversies and one cannot but wonder whether new names would be added to that list.

Perhaps we need to ask quite sincerely as to whose interest we are serving now by inexplicable delays and spicy comments?

According to reliable sources, recently senior officials from IRCON met high profile members of the administration in what was summed up as a 'heated discussion', where India told Malaysia in no uncertain terms that they are not desperate for "Malaysian business" and to be extremely careful how they handle New Dehli on this matter.

We have already upset Washington on several fronts. We are now embroiled in a 'media war' with Singapore. If this matter with India and China is mishandled, it will open up two new fronts creating an international mess for the incoming Abdullah government to clear up, as if they do not have enough problems to inherit already from Mahathir.

If India and China have any honour or pride in them, they will with immediate effect, withdraw from this project and send a strong signal to Putrajaya that they are not "desperate for this Malaysian project".