By Jose Barrock
The bidding for the RM8 billion double tracking railway line spanning Gemas to Johor Bahru is heating up with three prominent businessmen—Desmond Lim Siew Choon, Lim Kang Hoo and Tan Kay Hock—-tying up with three separate rail companies from China, vying for the job.
Sources say the lobbying for the large job which had all but died down—- is back in play.
The three who are all well connected, are neck-and-neck, with nothing separating them.
“It’s likely to be announced only after the elections….it’s three warlords bidding, so it’s a very touchy situation,” a source familiar with the bidding said.
Desmond Lim Siew Choon
The first of the three, Desmond Lim who controls developer Malton Bhd, and Pavilion Real Estate Investment Trust (REIT), is supposedly close to the premier’s wife Rosmah Mansor.
He is also the brother-in-law of Robert Tan Hua Choon, a close associate of former Finance Minister Daim Zainuddin. Hua Choon controls such companies as Jasa Kita Bhd, FCW Holdings Bhd, PDZ Holdings Bhd, Marco Holdings, Malaysia Aica Bhd, Keladi Maju Bhd, GPA Holdings Bhd and Goh Ban Huat Bhd, among others.
Desmond is married to Robert’s sister Tan Kewi Yong who is an executive director at Pavilion REIT and Malton.
Other than these strong ties, Desmond is also closely linked to officials of Qatar Holdings LLC, a Qatar state investment arm. The two are said to be building Harrods in Kuala Lumpur. Qatar Holdings is also a substantial shareholder in Pavilion REIT with a 36 per cent equity interest.
Desmond is understood to be partnering China Railway Engineering Corp for the Gemas-Johor Bahru job.
Lim Kang Hoo
Johor based businessman Lim Kang Hoo is known to be close to the Sultan of Johor, and has teamed up with China Railway Construction Corp Ltd (CRCC) and has roped in construction giants Gamuda Bhd as well. Gamuda is about six per cent controlled by the Perak royal family.
Kang Hoo has a controlling 23.5 per cent in the construction and building company, Ekovest, which has a market capitalisation of about RM450 million.
Other than Ekovest he has 47 per cent in Tebrau Teguh, a developer with a strong presence in Johor and a market capitalisation of RM680 million, 23.4 per cent in civil engineering and construction outfit PLS Plantations Bhd which has a market value of about RM336 million, and about 33 per cent in building materials provider Knusford Bhd, which has a market capitalisation of close to RM160 million.
In Knusford, Kang Hoo’s vehicle Aman Setegap is jointly owned with the Sultan of Johor, Tunku Ibrahim Ismail Sultan Iskandar.
Kang Hoo also has 36.5 per cent in Iskandar Waterfront Holdings Bhd which is slated for a RM1 billion floatation exercise on the Bursa Malaysia mid this year. His partners in Iskandar Waterfront are Khazanah Nasional Bhd’s Iskandar Investment Bhd with 51.2 percent, and Kumpulan Prasarana Rakyat Johor with the remainder 12.3 percent equity.
Tan Kay Hock
Tan meanwhile is known to be a golfing buddy of premier Najib Razak. Tan, has 42.2% in George Kent (M) Bhd and 43.9% in Johan Holdings Bhd.
Johan has a subsidiary, a health food supplier Jacks International Ltd which is publicly traded in Singapore. Johan’s core business lies in its Diners Club charge and credit card franchise. It also manufactures ceramics, wall and floor tiles, retails health foods and supplements, operates travel and tours, and has a small property development arm amongst others.
George Kent meanwhile is involved in the manufacturing of meters and industrial products and water-related infrastructure projects.
Tan came under severe flak when George Kent as part of a consortium won a RM955 million job for the construction of the extension to the Ampang light rail transit line stretching 17.7 kilometres from the existing Sri Petaling station to Putra Heights.
Seems like the flak has not deterred Tan – he is partnering China Communication Construction Co, looking to snare this RM8 billion rail job.
The names of the three Chinese companies are understood to have been put forward when 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.
In January 2011, Transport Minister Kong Cho Ha had said that the government had appointed two consultants to conduct studies on the Gemas-Johor Baru, railway line, and was negotiating with Chinese consortiums to do the job.
“We are still talking to them, nothing is firm yet. We hope the contractor can be appointed before the end of this year,” he told pressmen.
Two years down the road and there is still no progress.
In the late 90’s 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 Syed Mokhtar Albukhari’s MMC Corp Bhd and Gamuda bagged the job at a price tag of RM14.3 billion.
Under 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 (Ircon) was given the stretch spanning from Seremban to Gemas, for RM3.5 billion.
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