KUALA LUMPUR: A Chinese consortium led by China Railway Construction Corp Ltd (CRCC) is understood to be in the last leg of negotiations to bag the RM8 billion double-tracking railway line spanning Gemas to Johor Baru, which is the final stretch of the rail track.

It is learnt that a local will partner the CRCC consortium, but this aspect of the deal is still being ironed out.

CRCC’s proposal has gained traction after being offered to fund the construction of the railway track, a source familiar with the matter said.

“This stretch — the Gemas-Johor Baru stretch — has been delayed for many years. But this time around it looks as though CRCC will get it. The clincher is in the funding from what I understand,” the source said.

More than four years ago, in January 2011, then transport minister Tan Sri Kong Cho Ha said the government had appointed two consultants to conduct studies on the Gemas-Johor Baru railway line, and was negotiating with Chinese consortiums for the job.

The names of the three Chinese companies are understood to have been put forward when former Chinese premier Wen Jiabao and four ministers who were part of a 118-member delegation visited Malaysia in April 2011 as part of a Malaysia-China Economic, Trade and Investment Forum.

After 4½ years, there has been little progress.

In 2011, the three companies named by the Chinese government were CRCC, China Railway Engineering Corp (CREC) and China Communication Construction Co (CCCC), each tied up with local firms.

There were reports that CRCC was partnering Tan Sri Lim Kang Hoo, who controls 32.4% of Ekovest Bhd, an engineering and construction outfit. CREC, meanwhile, was said to be partnering prominent businessman Tan Sri Desmond Lim Siew Choon, who controls Malton Bhd and Pavilion Real Estate Investment Trust, among others, while CCCC had tied up with Tan Sri Tan Kay Hock, who holds 42.2% of George Kent (M) Bhd.

All three individuals are well connected, resulting in the difficulty in awarding the large-scale contract, sources said.

The delay has been much more than this four-year wait.

In the late 90s, China and India were slated to undertake the development of the entire stretch of the rail works for the double-tracking project spanning Padang Besar to Johor Baru, estimated at RM40 plus billion then. Payment for the building of the railway track was to be via crude palm oil.

However, in late 2003, a consortium made up of Tan Sri Syed Mokhtar Albukhary’s MMC Corp Bhd and Gamuda Bhd bagged the job for RM14.3 billion.

Under Tun Abdullah Ahmad Badawi’s premiership, the double-tracking project was initially scraped, but revived in 2007.

The MMC-Gamuda consortium was given the mandate to build the stretch from Ipoh to Padang Besar for RM12.5 billion, while Indian Railway Construction was given the stretch spanning Seremban to Gemas for RM3.5 billion.

This article first appeared in digitaledge Daily, on August 5, 2015.