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Hong Kong stops bidding for MTR projects involving UGL

Oct 10, 2014

Hong Kong has halted bidding for railway projects involving an Australian company at the center of controversial payments to Chief Executive Leung Chun-ying, Apple Daily reported Friday.

MTR Corp. (00066.HK), Hong Kong’s railway operator, shelved the public tender for two projects, including a HK$3 billion (US$386.8 million) train refurbishment program for which Australian engineering company UGL is bidding.

The move may be related to an investigation by the Independent Commission Against Corruption (ICAC) into MTR’s bidding procedures, the report said, citing an unnamed source.

In July, an employee of the rail company questioned MTR’s bidding process in documents filed with the ICAC which decided to investigate.

The investigation relates to potential violation of the anti-bribery ordinance.

UGL had been tipped to win the train upgrading project because of its experience. MTR chairman Raymond Chí’en sits on the UGL board, the report said.

The bidding will be postponed to the second quarter of next year, MTR said on its website.

On Wednesday, Australia’s The Age newspaper reported that Leung received US$7 million in secret payments from UGL after he became Hong Kong chief executive.

The Australian said the payments were outlined in a secret contract signed in 2011 when Leung was a private citizen.

Leung’s lawyer denied any wrongdoing in a statement in which he rebutted any suggestions of impropriety for the Hong Kong leader.

MTRC and UGL have worked closely since 2002. Last month, they joined forces with construction company Leighton Holdings to win a HK$25.2 billion project in Sydney, Apple Daily said.

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