Japanese outbid all in billion dollar deals

Press, 17 May 1984, Page 20

Japanese outbid all in billion dollar deals

From

FRANCIS DANIEL

of Reuter, in Singapore

Singapore’s biggest development project, a multi-billion dollar urban railway network, is assuming more and more a Japanese complexion. Japanese firms have stolen a big lead over their rivals from Europe, Canada, and the United States' in the race to win contracts for the ambitious project, known as the Mass Rapid Transit (M.R.T.). Since the ground-breaking ceremony last October, Japanese companies have clinched about twothirds of the contracts worth 1.5 billion Singapore dollars ($NZ1147.5 million) awarded thus far and are primed to mop up more in the coming months. Their biggest success came last week when Kawasaki Heavy Industries received the nod to build 396 train cars. The railway system is expected to take 10 years to build, at an estimated total cost of five billion Singapore dollars (SNZ3B2S million). Japanese companies will be involved in almost every segment of

the M.R.T., ranging from the construction of underground tunnels, stations, and rolling stock, to the installation of environmental control and fire alarm systems. Kawasaki beat Britain’s MetroCammell and Sweden’s Asea last week with a final bid of 582 million Singapore dollars (SNZ42B million). They pulled it off without establishing joint ventures with local partners, as their western rivals had done. The Japanese said they have no secret success formula. They could outbid the Western firms because their manufacturing processes are low-cost and their workers are highly productive, they said. In gaining the rolling stock contract, Kawasaki agreed to train 300 Singaporeans at its plants in Japan to ensure a smooth transfer of expertise. Competition for the M.R.T. contracts is so severe that MetroCammell at one stage had complained that an attempt was made to sabotage its bid for the M.R.T. rolling stock contract.

The chairman, Tony Sansome, said that a forged telex message, purportedly from Metro-Cammell’s Birmingham headquarters to its office in Singapore, claimed that high-ranking Singapore officials had been bribed to secure the rolling stock tender. The telex was “accidentally” routed to the Singapore Ministries of Finance, Communications, and Trade and Industries in what Mr Sansome called a crude attempt to heighten the intrigue. Singapore’s Corrupt Practices Investigation Bureau has yet to complete its probe of the incident, but Mr Sansome said that he believed the fake telex had no effect on the outcome of the bidding. The transit corporation said it was awarding the contracts in three separate segments. It has yet to give details of the contracts still to be offered, but one of the largest, roughly in the same range as the rolling stock contract, will be the installation of an automatic fare collection system, a M.R.T. spokesman said.