KUALA LUMPUR, Aug 23: Malaysia said on Saturday it wants bids from China and India lowered further before awarding them contracts for a multibillion-dollar rail project, which is part of a trans-Asia link from Singapore to China.

Prime Minister Mahathir Mohamad told reporters the foreign consortia had overquoted from the outset.

We cannot pay at a higher cost something that we can get at a lower cost. We are still open to them but they must reduce their costs, Mahathir told reporters.

The government, which has received a lower quote from a local consortium, has budgeted for $4.47 billion.

Reuters reported earlier this week that the foreign consortia had dropped their price to 20 billion ringgit.

Of this, China Railway Engineering Corp (CREC) and its local partners have bid about five billion ringgit for the southern section.

Indian Railway Construction Company (IRCON) and its partners have bid nine billion ringgit for the northern section.

Japan’s Mitsui & Co, the main signalling contractor, has lowered its price to around six billion.

Mahathir made no mention of the latest 20 billion ringgit figure, but, asked about the Chinese and Indian consortia, said they had overpriced.

It’s a very costly project. The initial quotation was 42 billion ringgit and then when we said it can be too high and all that, they reduced it to 24 billion ringgit, which means that they must have overpriced the costs so high, Mahathir said.

Malaysia signed letters of intent with the Indian and Chinese companies last year, inviting them to draw up proposals for separate parts of the project, but a far lower bid from a local consortia threw the competition wide open.

Local tycoon Syed Mokhtar Albukhary’s flagship firm Malaysia Mining Corp Bhd (MMC) and infrastructure company Gamuda Bhd submitted a joint bid worth 14.5 billion ringgit.

Well, if he can do it, why not? Mahathir said when asked about the businessman’s proposal.—Reuters