TRANSIT took note of this very interesting article, in which a PAS MP is critical of the government’s purchase of 38 Electric Multiple Unit (EMU) trainsets from Zhuzhou locomotive of China.
Wed, 30 Jun 2010
By Ken Vin Lek
KUALA LUMPUR: PAS MP Dzulkefly Ahmad today warned that the government risks losing RM500 million if it went ahead with the purchase of Electric Multiple Units (EMU) from Chinese company, Zhu Zhou Electric Locomotive Co Ltd.
Zhu Zhou was chosen out of eight potential bidders who manufacture the EMU for the electric train service.
Speaking to reporters in Parliament, the Kuala Selangor MP said: “It is unfortunate for the people and the country that the offer price is much higher than the price agreed upon by the Ministry of Finance on Jan 4.”
“The people want to know. Why is the cost of each unit much higher than previously proposed even when there was direct negotiations with the company?” he added.
Keretapi Tanah Melayu Bhd (KTMB) agreed to buy 38 units of six-wagon EMUs instead of the initial eight units of three-wagon EMUs after the government decided to fast track this project.
The spike in orders came after Prime Minister Najib Tun Razak placed emphasis on public transportation as one of the National Key Result Areas (NKRA).
Cancel LOA, hold probe
Dzulkefly said that the current price of each EMU is valued around RM35 million taking into consideration the inflation rate.
“The government, however, is paying around RM48 million for each of the EMU which in total results to a net loss of around RM500 million,” he said.
“What ‘fast track’ are they talking about in the NKRA if it is going to consume public funds which should not be spent this way,” he adde
In view of this, the PAS leader urged the government to immediately cancel the Letter of Award
(LOA) given out to Zhu Zhou and to blacklist the company.
“We should not give them a LOA because the same company has jacked up the price of each unit by RM18 million even though we have agreed to buy more units.
“Based on the economy of scale, the price should be cheaper and not otherwise,” he said.
Dzulkefly pointed out that although KTMB representatives went to China to discuss the purchase bill, the total cost went up instead of down.
The PAS leader said an investigation must held over this matter.
Thank you! Finally, an MP who is seriously questioning a government purchase just after it was made. This is a huge step forward, considering that in the past, the only time a government purchase is questioned is a few years later when the Auditor General finally completes a report.
Kuala Selangor’s question about the government paying RM18 million extra for each train has been cleverly placed – either the government admits that it is overpaying, or the company explains why the cost of the trains is RM18 million higher per EMU.
Either way, the public wins – we get an investigation of procurement, we get lower prices for the trains, and we get MPs who are actually ready to challenge the government on their purchases.
More information about Zhuzhou Electric Locomotive’s products can be found here (scroll down).