DAP MP Tony Pua rebutted Malaysia Steel Works Bhd (Masteel) defence of how it privately initiated the Iskandar commuter rail project to seek government funds.

He added that the closed-door negotiations for the RM1 billion project ran against public interest.

Masteel had clarified that it has not been awarded any government job but had only submitted a private sector initiative which had the approval of Ministry of Transportation.

However this was still pending feedback from the Land Public Transport Commission (SPAD).

NONE "Given Masteel's feedback , the direct negotiations must stop immediately and Prime Minister, Najib Abdul Razak himself must insist that the project be tendered openly and competitively," Pua ( left ) said in a media statement.

Details of the project emerged after Metropolitan Commuter Network (MCN) Sdn Bhd, a subsidiary of Masteel, announced to Bursa Malaysia on May 31 that it had sought a RM700 million soft loan for the project from the Finance Ministry.

20 stations

It was reported that the RM1 billion southern Johor commuter rail project will involve the construction of as many as 20 stations on existing KTM right-of-way.

"The question that needs to be asked to the Prime Minister's Department is, if the government has to fund 70 percent of the project, why bother privatising it in the first place to a 37-year concession?" Pua said.

Pua also rebutted Masteel's CEO Tai Hean Leng defence of the project, as reported by Kinibiz .

Masteel, a steel manufacturer, had claimed that operating trains were simpler than steel mills even though it had no such direct experience.

It also said that the project could turn profitable after 12-13 years.

Pua said this would mean that other companies, also with similar level of expertise, should be given a chance and also questioned why a long 37-year concession was needed if profits could be achieved much sooner.

"It is only by ensuring that all projects awarded by the government are at the best value, can the interest of the commuters and Malaysians be protected - e.g., the commuter fares will be at the lowest possible," Pua said.

He said that Masteel was welcome to bid again for the project in an open tender exercise.