Majestic Engineering in RM350m deal with KTMB?

By Sharen Kaur

KUALA LUMPUR: Majestic Engineering Sdn Bhd is expected to supply new diesel multiple units (DMU) to Keretapi Tanah Melayu Bhd (KTMB) in a deal worth about RM350 million.
  Business Times understands that the little-known company has received a letter of intent (LoI) from the Transport Ministry to supply 13 four-car train sets.
  The LoI for the project was awarded last month and based on direct negotiations, said sources with knowledge on the matter.
  Majestic Engineering, which provides engineering and project management services specialising in the railway and related industries, is believed to be linked to former secretary-general of the ministry, Datuk Wan Awang Wan Yaacob.
  The company will partner Chinese manufacturer China Railway to supply the DMUs, said the sources.
  A DMU is a multiple-unit train powered by on-board diesel engines. It requires no separate locomotive, as the engines are incorporated into one or more of the carriages.
  The trains will serve the east cost line from Gemas in Negri Sembilan and Tumpat in Kelantan, running at about 120kph.
  "Both companies have put a price tag of about RM27 million for each train set and this is above the current market value. The contract could have been priced lower if awarded based on tenders. It could have been done for RM250 million using European technology, or RM19 million each," said a source.
  He added that Majestic Engineering was expected to send the technical specifications for the DMUs to the ministry next month, before the letter of award could be finalised and issued.
  "This will be the first time KTMB will operate DMUs. It had previously ordered DMUs from a manufacturer in France but the LoI was cancelled after it was highlighted in Parliament that the deal was awarded based on closed-door negotiations," the source said.