The government today confirmed that the implementation of the controversial multi-billion ringgit double-tracking railway project, currently facing a host of uncertainties, would be deferred "for the time being".

Transport Minister Chan Kong Choy said the cabinet decided to postpone the project after extensive deliberations at yesterday's weekly meeting in Putrajaya.

"The cabinet discussed the project thoroughly, particularly the funding and technical aspects as well as the implementation schedule," he told reporters in Bangi.

He said cabinet members had felt strongly about suspending the project temporarily.

"The cabinet will look into the details next week following reports on the project's funding and technical areas to be submitted by the Finance and Transport ministries."

Chan was speaking to reporters after witnessing the signing of a memorandum of understanding between Emrail Sdn Bhd and Universiti Tenaga Nasional to offer railway engineering programme and training as part of the latter's course syllabus.

The 'Railway Centre of Excellence' programme is co-sponsored by Mitsui & Co Ltd, Mitsui & Co Transportation Systems Asia Sdn Bhd and Union Switch and Signal (M) Sdn Bhd.

The contentious north-south railway project is part of the 5,500-km trans-Asia railway line spanning from southern China right down to Singapore through several Asean countries.

The controversy erupted when the government dropped two railway giants from India and China in favour of a local consortium - Gamuda Bhd-Malaysian Mining Corporation Bhd JV - which won the contract with a bid of RM14.5 billion, lower than the government's RM17 billion.

Negotiations to continue

Asked why the government did not finalise the detailed aspects of the project before awarding it to Gamuda-MMC JV, Chan said: "I only prefer to say this much for now... that the project has been postponed for the time being."

However, he added that ongoing negotiations with the consortium will continue despite the postponement.

He also declined to comment further on whether the letter of award issued to Gamuda-MMC JV will be withdrawn as a result of the cabinet decision.

Also present were Transport Ministry secretary-general Zaharah Shaari, Emrail chairperson Zaki Tun Azmi, Keretapi Tanah Melayu Bhd chairperson Thong Yaw Hong, Mitsui & Co Ltd managing director Takashi Takagi as well as Japanese and Australian government representatives.

On Wednesday, several financial publications reported quoting highly-placed government sources as saying that the troubled project will be postponed indefinitely.

Indian state-owned Ircon International Ltd, its partner consortium China Railway Engineering and Telecommunication Centre (Cret) and Mitsui & Co Ltd were each issued with a letter of intent last year.

However, days before former premier Dr Mahathir Mohamad retired, their combined bid of RM24 billion was said to be too costly.

The companies reportedly submitted a final bid of RM19.7 billion while negotiations were still going on at the Transport Ministry to further reduce the figure.

On Oct 22, Gamuda-MMC JV announced that it had been given the lucrative job.

Several unconfirmed and confirmed reports of retaliation by India and China followed Malaysia's about-turn on the derailed railway deal.

This is because the railway project was based on a government-to-government agreement with payment to be in the form of eight million tonnes of crude Malaysian palm oil exports over six years worth some RM12 billion.