It is of great concern to read from reports that construction of the crucial interstate Pahang-Selangor water supply scheme may be further delayed.

In March this year, the government, after much protracted negotiations, inked an agreement to obtain a RM2 billion loan from the Japanese Bank of International Cooperation (JBIC) to finance part of the Pahang-Selangor water transfer scheme.

It is reported that the government is now having a second thoughts over taking the Japanese loan because of fears that local contractors will lose out to the international big guys. This reported rejection of the Japanese loan was promptly denied by our second finance minister who was reported to have said 'we are still holding talks with the Japanese'.

The 2,200 million litres per day water supply project involves the construction of a dam and a 44km raw water tunnel of over five metre in diameter in Pahang estimated at RM3.5 billion and downstream works (water treatment plants and distribution works) in Selangor estimated at RM4.5 billion.

The Japanese loan taken by the federal government is only to finance the works on the Pahang side of the scheme. The major cost of the project in Pahang is the construction of the raw water transfer tunnel, which requires foreign equipment and expertise. This tunnel falls within the critical path of the timely completion of the whole scheme.

But the fear of insufficient involvement by local contractors in this project is totally unfounded. While the dam and the tunnel works in Pahang are open to international bidding, the downstream works located in Selangor are only open to local contractors with local financing.

The procurement guidelines of international lending agencies like the JBIC require international open tenders for all works and supplies to be awarded after pre-qualifications of contractors and suppliers.

So the question of local contractors failing to secure major works in this scheme does not arise at this juncture. Experienced local contractors can tender for the works on their own or in joint ventures with other local or foreign contractors.

With home ground advantage, there is no reason why they cannot secure a major portion of the works unless they are not competitive enough and require a 'big helping hand' from the government.

In the past, nearly all major infrastructure works in this country have been given out without open tenders which in turn allowed for corruption, favouritism and nepotism to creep into the awarding of contracts. This, sadly, resulted in higher costs, substandard works and late completion or even abandonment of works.

The timely completion of the interstate Pahang-Selangor water supply project is critical. Even if it the project takes off the ground now, it will only be completed in year 2011 and consumers in Selangor, Kuala Lumpur and Putrajaya will suffer because of water shortages and rationing from the year 2007 onwards.

One cannot imagine the impact to the economy if the project were to be further delayed. It may be worse than that of 1997-2000 Asian financial crisis.

It is hoped that the-powers-that-be would get the project started without further delay and not simply cave in to the demands of a few local big boys in the construction industry at the expense of over six million water consumers in the Klang Valley.