An opposition MP, in two letters to the prime minister, has disputed the claim that the "lowest bid" had won for the Malaysian Mining Corporation Bhd and Gamuda Bhd (MMC-Gamuda JV) the multi-billion ringgit double-tracking railway contract.

Husam Musa, the PAS member of Parliament for Kubang Kerian, said the contract awarded to the joint venture partners on Oct 21 could not have been based on the lowest bid - because a clause for a variation order is included.

"The letter of award containing the variation order does not specify the percentage for additional work. (Even) if 30 percent is imposed, the final cost will definitely increase (from RM14.5 billion) to RM18.8 billion," he said, quoting Deputy Transport Minister Douglas Uggah Embas' reply to a related question in the Dewan Rakyat last week.

Citing the example of the 179-km Rawang-Ipoh double-tracking project under construction by DRB-Hicom and Emrail Sdn Bhd, Husam said the original offer of RM14 million for every kilometre was subsequently upped to RM26.4 million, marking an increase of 86 percent.

He said the government must explain the percentage of the variation order that has been agreed upon in the MMC-Gamuda JV deal in order to prove that the bid was in fact the lowest.

Change of terms

Husam pointed out that the initial terms of the rail deal had also changed following the 'cancellation' of the letter of intent with the Indian and Chinese contractors.

"(Since this has happened), the entire project terms have changed, including methods of payment and financing," he told a press conference at the parliament lobby in Kuala Lumpur today.

The initial palm oil-for-rail deal involved a guaranteed import of eight million tonnes of Malaysian palm oil by India and China.

Husam said that, with the award of the contract to a local consortium, the government would now have to scout for a new funding source.

"Apart from palm oil imports, Malaysia had also secured various projects worth tens of billions of ringgit in India and China," he noted.

"There is a great possibility that we may lose long-term business opportunities, now that our country's integrity has been tarnished. Our trade partners' trust in us may have been terribly affected."

'Company investigated'

He also questioned the exorbitant initial bid by the Indian and Chinese contractors - Indian Railway Construction Company Ltd (Ircon) and China Railway Engineering Corp (CREC) - of RM42 billion, which reportedly dropped to RM19 billion.

"I think the initial offer price included 'special allocations' upon the request of certain parties. I say this based on a letter dated Dec 5 2001 to the Indian government asking Ircon's managing director Arun Prasad to be retained in his post, past his retirement age," he said.

According to Husam, Arun and six other top officials in Ircon were investigated by India's Central Vigilance Commission for, among others, appointing a Malaysian company for a consultancy fee of nine percent, well above the usual average of between four and 4.5 percent.

"This is what Abdullah Ahmad Badawi ( photo ) should probe thoroughly as the new premier. If such a situation existed, how was it possible for Ircon and CREC to offer a lower price?"

Comments were unavailable from New Delhi-based Ircon, while the diplomatic missions here of both countries have also remained mum.

Husam also argued that if the government had been serious about considering the lowest bid, it would not have issued the letter of intent to Ircon and CREC without negotiating the final cost.

"Why was there no open tender? That would have provided all parties with an equal chance as well as given the government the best price.

"This would have also been discussed at the cabinet level before the letter of intent was issued, when Abdullah was still deputy premier. Why didn't he raise the 'lowest bid' issue then?"

The letter of intent, given to Ircon and CREC in mid-2002, has yet to be officially revoked.

More confusion

In a separate press conference today, Abdullah was quoted by Bernama as rejecting any proposal to "re-look" at the double-tracking contract, but later said the cabinet will scrutinise the contract before it is sealed.

Yesterday, de facto law minister Dr Rais Yatim added to the confusion when replying on behalf of Abdullah in the Dewan Rakyat. He indicated that the rail deal was still up for grabs.

Meanwhile, DAP chairperson Lim Kit Siang urged the government to re-initiate the bidding by way of open tender in order to provide a level playing field for local and foreign contractors.

"We propose that the government cancels the award of the project to MMC-Gamuda in the interest of fair play, competitive pricing, transparency and integrity," he said.

"This will (also) remove any whiff of a scandal or a shadow of doubt linking the whole controversy to grand corruption."

Lim described 'grand corruption' as a category of graft which Abdullah needed to address urgently.