Scandal-hit firm likely to get water tunnel deal
Tuesday February24, 2009 11:27 am
Andrew Ong, Malaysiakini.org | Feb 18, 2009
The federal government looks set to award a lucrative water tunnel project to a Japanese-led consortium which includes a scandal-tainted Japanese company.
MCPX
nishimatsu construction co limited 180209 logoThe Shimizu consortium consists of Japan’s Nishimatsu Construction Co, along with local players UEM Builders Bhd and IJM Corp Bhd.
Currently, Nishimatsu is embroiled in two high profile corruption probes.
In Bangkok, Nishimatsu is being probed for allegedly bribing a city official with 200 million yen (RM8 million) to secure a flood-control project.
Back in Tokyo, a probe is underway into the company’s alleged slush fund. The probe has already led to the arrest of several former company executives, including its ex-president Mikio Kunisawa.
Japanese prosecutors are probing the company for allegedly violating the country’s foreign exchange and trade laws.
Now that Nishimatsu’s reputation is under scrutiny, industry sources said the Malaysian government ought to review all decisions on the awarding of the water tunnel project.
“The government should send a message to the public and the international community that it won’t compromise on accountability and ethics,” said a source familiar with the project.
The water tunnel project is a portion of the Pahang-Selangor Raw Water Transfer Project, reportedly valued at RM5 billion, commissioned in 2003 by the Energy, Water and Natural Resources Ministry.
The project was designed to overcome water shortages in Selangor expected next year and is funded by the Japan Bank for International Cooperation (JBIC), which is providing a RM2.5 billion low-interest loan.
Conditions set by company
Bidding on the project was opened in April 22 last year but a decision on the winner has yet to be announced due to several complications.
Of the three companies shortlisted, Shimizu reportedly provided the lowest bid of RM1.31 billion, albeit with conditions.
Shimizu reportedly set conditions for a variation order in case the consortium runs into problems during tunneling works.
“They should have been disqualified from the onset for stipulating conditions,” said the source, who added that allowing Shimizu to amend its proposal after bidding was closed was unfair to the other bidders.
Industry sources told Malaysiakini that the Shimizu Corp-led consortium was brought back to the negotiation table in late January and was asked to drop its conditions.
It is understood that the government is now waiting for approval from aid agency Japan International Cooperation Agency (JICA) and lender JBIC.
Initially, the Energy, Water and Natural Resources Ministry was said to be in favour of the second lowest bidder - Japanese firm Taisei Corp and its local partner HRA Teguh Sdn Bhd.
However, JICA is said to be adamant that Shimizu is awarded the project as it is the lowest bidder, reported Singapore daily Straits Times on Jan 9.