A Japanese-led consortium of four companies has been awarded a lucrative contract for the Pahang-Selangor raw-water transfer project.

The RM1.3 billion deal was inked in Putrajaya this morning between the federal government and Shimizu Corp (project leader), Nishimatsu Construction Co and local players UEM Builder and IJM Corp.

nishimatsu construction co limited 180209 logo The move is likely to raise eyebrows because Nishimatsu is facing graft probes in Japan and had previously been accused of negligence in Singapore.

Tokyo prosecutors are looking into allegations involving a slush-fund to fuel dodgy political donations. This led to the recent resignation of company president Tadashi Ishibashi and opposition leader Ichiro Ozawa.

Singapore, in a public inquiry held in 2005 to look into the collapse of the Nicoll Highway, had accused Nishimatsu of flouting laws involving safety standards.

Energy, Green Technology and Water Minister Peter Chin said, however, that this does not matter as long as the company has the ability to deliver.

peter chin “Let’s put it this way, if we are not confident that they are carrying out their work, as per tender, we would not have selected them,” he said, when asked if public confidence in the project could erode.

“As long as we are happy that they are capable of carrying out the job, which they are, the issue of public confidence should not arise. They have given us assurance that the project can be carried out without a hitch.”

Chin was speaking at a press conference today after the signing ceremony. Project leader Ismail Mat Noor was present, but not representatives of the four companies.

Pressed further on the government practice of blacklisting errant companies, Chin said that incidents abroad would not affect the decision.

“This is happening in Japan. There is nothing to do with local units, which (have a) joint venture. I don‘t see why it should have direct bearing (on us),” he said.

No ‘conditional bid’

Ismail appeared unaware as to which of the four companies will be carrying out boring works for the 45km tunnel.

“They are a consortium. They will discuss among themselves. They haven’t decided yet,” said Ismail, adding that the tunneling works would begin on June 1.

The project is designed to overcome water shortages in the Klang Valley until 2025.

Under the deal, Selangor will buy raw water from Pahang at RM0.10 per cubic meter, estimated at RM80 million annually.

Chin said the project loan would be repaid over a period of 40 years to the Japanese International Cooperation Agency, at an interest of 0.95 percent per annum, after a 10-year grace period.

He further denied allegations in several news reports which claimed that the consortium had violated bidding conditions by submitting a conditional bid.

“There is no such thing as a conditional bid. Let's be clear about it,” he said.

According to a March 23 report in The Edge , the conditions were said to include a price variation order depending on the hardness of the rock. The report added that, in international tenders, conditional bids are generally disqualified.

pahang selangor raw water transfer project 180209