PURCHASE OF TRAINS TO PROCEED DESPITE MACC INVESTIGATION

The Transport Ministry (MOT) will go ahead with the purchase of 38 units of six-car Electric Multiple Unit (EMU) trains despite an ongoing investigation by the Malaysian Anti-Corruption Commission (MACC).


The ministry said today it had given the letter of award (LoA) to CSR Zhuzhou Electric Locomotive Co Ltd of China on May 19, "before any investigation was initiated by MACC", and an agreement was signed on July 23.

"The allegations are (being) investigated by MACC and till today, MOT has not received any report on the investigation," it said.

In August, the Public Accounts Committee (PAC) recommended an investigation into KTMB’s RM1.89 billion purchase of the new electric trains. PAC chairman Datuk Seri Azmi Khalid had said the committee had formally made a request to the MACC in a letter.


We are reminded about the cancellation of the purchase of eight Diesel Multiple Units (DMUs) from Spain for KTMB’s commuter service network despite an LoA and agreement already signed.

In rushing to secure the EMUs to overcome the poor state of public transport, KTMB had not "ironed out the entire scope of work in the agreement with the supplier".

Zhuzhou is now asking for extra charges for the automatic train protection (ATP) system and, worse still, it wants to extend the delivery period. So why the rush in the first place?


We are also unhappy over KTMB’s agreement to buy the EMUs at a cost of RM48 million each, using the direct negotiation method. He said the ministry may end up paying about RM500 million extra for the whole deal if it goes ahead with the purchase from the company, which had earlier won a tender to supply eight three-car EMU sets at a cost of RM13.725 million a set.

The tender for the three-car EMUs in 2008 was cancelled following new demands and needs highlighted by the National Key Results Area (NKRA) for urban public transportation. The NKRA had highlighted the need to increase passenger capacity rapidly.

Former transport minister Datuk Seri Ong Tee Keat had defended the increase in cost, citing the difference in technical specifications. Ong had said Dzulkefly "runs the risk of comparing apples with oranges".

The only difference in the specifications between the two sets was the CCTV and slide presentation panel for the 38 EMU six-car trains.

Even after taking into account various anomalies like the foreign exchange rate and rising cost of materials, the sets should only be priced at RM35 million each, at the most.

So where is the loophole ?