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19 May, 2016

Chinese consortium prepares for Singapore-Malaysia rail bidding

Beijing, (China Daily) May 14, 2016 – A Chinese consortium is preparing to bid for the high-speed project linking Malaysia’s Capital Kuala Lumpur and Singapore, a source with China Communications Construction Group said on Friday.

The source in Beijing-based CCCG, a major construction enterprise of transportation infrastructure and dredging projects, said that consortium members are discussing details on how to carry out the project.

A group of attendants ready for boarding a high speed train bound for Kunming from Shanghai. [Photo/Xinhua]

Sheng Guangzu, general manager of the China Railway Corp, the leading company in the consortium, said it would also involve another 5 companies including China Harbor Engineering Company Ltd.

The subsidiary of CCCG will start a three-day visit starting from May 23 to Malaysia to push for the project.In March China Railway announced it was investing $2 billion to build a regional center in Bandar, Malaysia, near the proposed site for the terminal of the line, to help promote local railway and road construction projects.

The 350-kilometer railway line, the first high-speed rail project in Southeast Asia, has attracted not only Chinese companies but also Japan’s Kawasaki Heavy Industries, Germany’s Siemens and French company Alstom, all of which said they would bid for the project.

When constructed, the entire trip will take two hours with the train traveling at an average of about 330 km/h.

Experts said on Friday that the Chinese consortium would have an upper hand in bidding for the project especially after China Railway’s acquisition of stakes in Bandar Malaysia, a transit hub, and the terminal of the proposed project.

Malaysian state fund 1Malaysia Development Bhd, or 1MDB, agreed to sell 60 percent of its property project in Bandar Malaysia to China Railway to ease its debt burden earlier this year.

Liang Haoguang, head of the Capital Development Institute of China, said that China’s railway and construction companies also have an edge over its rivals in terms of technologies and project costs.

“China’s rich experience in large construction projects will help win the rail project, because normally it takes relatively less for Chinese companies to finish the project, and financing is also easier for the cash-rich Chinese companies,” he said.

China is home to the world’s longest and most modern high-speed rail system with over 19,000 km of track.

It has strengthened regional cooperation with construction of many industrial clusters worth billions of dollars in Southeast Asian countries including Thailand, Malaysia and Indonesia.

Liang said that the closer ties among those countries will also pave the way for the bidding, with those ties helping gain trust from local companies.