PETALING JAYA, Nov 11 (Bernama) -- Primary Industries Minister Datuk SeriDr Lim Keng Yaik Tuesday said that there might be retaliation from Chinaand India over the handling of the contracts for Malaysia'sdouble-tracking railway project.

"I fear there might be retaliation, coming from these two countries...andof course they are not happy after having negotiated for three years andunceremoniously told that the Letter of Intent had been cancelled."

"Who will not be angry... and the easier way to retaliate is by using palmoil," he told reporters after opening Eye Laser Correction Sdn Bhd's neweye laser centre at the Kelana Jaya Medical Centre here Tuesday.

Dr Lim was responding to a question if Malaysia's palm oil export to bothcountries would be affected following the Malaysian government's decisionto award the RM14.45 billion North-South double-tracking rail project tothe Malaysia Mining Corp Bhd (MMC)-Gamuda Bhd joint venture.

The Indian Railway Construction Co (Ircon) and the China RailwayEngineering Corp (CREC) had both received letters of intent from theMalaysian government in mid 2002 to proceed with the job.

However, MMC-Gamuda, which submitted a counter bid in July this year, wasawarded the project by the Transport Ministry on October 22 by virtue ofits lower pricing for the project.

MMC and Gamuda in statements to the Kuala Lumpur Stock Exchange said theyhad offered the Indian and Chinese companies opportunities to participatein the project, but both parties were said to have not responded in timeto the offers.

Dr Lim said he was monitoring the situation closely as both the countriescould retaliate in many ways, particularly in the "subtle way" of passingthe message of their displeasure with the Malaysian government.

Pointing out an example, he said the Indian authorities could choose togive the runaround for Malaysia's shipment of crude palm oil to thecountry. "They can say Calcutta Port is full, you go to Mumbai port...."

Dr Lim recalled a particular incident when Malaysia decided to stopimporting chicken from China sometime back and China had "retaliated" byusing the import of palm oil from Malaysia.

"We had been exporting palm oil to China without any problem but when westopped the import of chicken from China, suddenly our palm oil was foundto have too much microbes."

China did not say it was retaliating but gave a "final warning" that ithad found the microbes in the shipment of palm oil, Dr Lim said.

He also said that there had been reports of an Indonesian ministervisiting India and that the minister would be in China soon, presumably tolobby for more imports of palm oil from Indonesia.

-- BERNAMA