Ircon International Ltd and consortium partner China Railways and Telecommunications (Cret), the parties central to the controversial 623-km electrified double-tracking deal, had nothing much to say about Malaysia's decision to postpone the multi-billion ringgit project.

Ircon initially worked on the 336-km northern grid (Ipoh-Padang Besar) while Cret handled the 287-km southern sector (Seremban-Johor Baru) but on Oct 22, Gamuda Bhd-Malaysian Mining Corporation Bhd JV announced the award of the lucrative contract.

Yesterday, Prime Minister Abdullah Ahmad Badawi disclosed the final cabinet decision to defer the project on grounds of prioritising more needy projects and trimming a budget deficit.

Contacted today, Cai Ze Min, director and the Asia representative of Cret, said everything now depends on the Malaysian government.

"We came (to Malaysia) to develop our business, so nothing has changed in that sense. As you know, (the railway project) is a government-to-government agreement and our government has not instructed us on anything," he said in a telephone interview.

"We respect the Malaysian government's decision. We are also concerned about the business cooperation and relationship (that is) developing between Malaysia and China."

Government's prerogative

Similarly, general manager of Ircon's regional office in Kuala Lumpur, Hitesh Khanna, said the decision to shelve the double-tracking project was the "government's prerogative".

"We have nothing to comment. It is a decision reached by the Malaysian government and we respect that," he said.

"There were some related negotiations previously but nothing more since (yesterday's statement). We have also not decided on the next step."

Hitesh, however, declined to comment on possible implications, direct or indirect, arising from yesterday's cabinet decision.

He said Ircon will continue working on its other regional projects.

Asked if he was disappointed with the postponement, Hitesh said he had felt that earlier, alluding to Malaysia's move to renege on its letter of intent to Ircon and the other two contractors last year.

Several industry sources said the postponement of the country's single largest privatised infrastructure project, was regrettable and described it as a "disappointing and hilarious affair".

They fear that the prolonged uncertainties and the subsequent postponement would set a bad precedent for future bilateral trade relations.

"For an outsider observing the goings-on with regards the rail deal, I feel amused by this whole episode. Maybe many Malaysians think the same way too," said a source.

"But what is there to say anymore. It is the government's decision and the parties have to stick to it, regardless. There is nothing much they can do otherwise."

Millions lost

Another insider said the double-tracking project was in such a mess following the sudden award of the deal to Gamuda-MMC JV that the money spent on preliminary works over the last couple of years would probably have to be written-off.

"The main contractors, sub-contractors and sub-sub-contractors would have forked out millions while on the job.

"Even if the standard industry practice provides for such situations or eventualities where the parties assume the liabilities, such a thing should never have happened in the first place."

Mitsui & Co, the third company that was issued the letter of intent, could not be reached for comments.

Meanwhile, the opposition parties want the deferred deal, particularly the tender and contract awarding process, to be probed .