Friday, December 12, 2003

The 'Mokhtar test' for Malaysia's new Prime Minister

KUALA LUMPUR Just when Malaysia-watchers had started celebrating the end of cronyism and the beginning of a new era, come some confusing signals.
Some newspapers had reported yesterday that Malaysia had decided to "postpone indefinitely" a controversial, multi-billion dollar rail deal awarded to favoured businessman Syed Mokhtar Al Bukhary in the final weeks of the Mahathir administration.
Observers said this signalled that Malaysia's new Prime Minister, Mr Abdullah Ahmad Badawi, was stepping out of his predecessor's shadow.
But yesterday, Transport Minister Chan Kong Choy denied reports that a final decision had been taken on the matter.
He agreed that there was a feeling in the Cabinet that the grand project which threatened to hurt Malaysia's ties with India and China should be postponed. But he said nothing had been decided yet and the project would be discussed at next week's Cabinet meeting.
"I must say there is a strong feeling in the Cabinet that the project be postponed for the time being," he told Bernama.
In some ways, this is seen as an early test of Mr Abdullah and the way his government conducts business, reported AFP.
The project to build an electrified double-track rail line stretching the length of peninsular Malaysia was originally to be awarded to a group of Indian and Chinese contractors. They were even issued letters of intent. But at the last minute, Dr Mahathir Mohammed's administration, which preferred private negotiations to open tenders, awarded it to Mr Syed Mokhtar's consortium for RM14.45 billion ($6.5 billion).
Mr Syed Mokhtar, who also controls Senai Airport and the Port of Tanjung Pelepas, was expected to use it as part of his plans to turn Johor into a logistics hub to rival Singapore.
But newspapers like the Asian Wall Street Journal and The Edge quoted unnamed officials as saying that the new administration was not in favour of splurging so much money.
Some reports have suggested that if Mr Abdullah turns his back on Dr Mahathir's favourites, he could have a battle on his hands as he is yet to establish an independent base within the party.
Also, entrenched interests will not give in without a fight, analysts have said.
Next week's Cabinet meeting could answer a lot of questions. Agencies

Parent site: "Focus on Malaysia"