Putrajaya to recover S$3.31 billion from scrapping ECRL

KUALA LUMPUR — Malaysia stands to recover RM10 billion (S$3.31 billion) in advance payments if the China-backed East Coast Rail Link (ECRL) project is cancelled, Finance Minister Lim Guan Eng said on Monday (Oct 22).

“The status of ECRL, however, is still undecided pending further negotiation to reduce the costs,” he told Parliament during the question-and-answer session.

“But we stand to recover RM10 billion in advance payments if the project is cancelled.”

Mr Lim was responding to Barisan Nasional's Member of Parliament Noh Omar’s question on the status of the ECRL project.

The ECRL is a 688-km rail link that will connect the South China Sea off the east coast of peninsular Malaysia with the strategic shipping routes of the Straits of Malacca to the west. The project, awarded to China Communications Construction Company (CCCC), has been suspended.

The deal was authorised by former prime minister Najib Razak, who courted Chinese investment and was a cheerleader for President Xi Jinping's signature Belt and Road Initiative in South-east Asia during his decade-long rule.

However, the new Malaysian goverment under Pakatan Harapan (PH) said it will relook into mega project deals signed under Mr Najib after it took over the country's administration following the May 9 General Election.

During his official visit to China recently, Prime Minister Mahathir Mohamad said Putrajaya had cancelled the ECRL and two gas pipeline projects valued at another RM9 billion due to their inflated costs which he blamed on the previous Barisan Nasional (BN) administration.

He, however, later said studies were still being made on whether to defer the projects or deal with them in some other way.

Malaysia, via its subsidiary Malaysia Rail Link Sdn Bhd (MRL), has paid CCCC RM19.68 billion for the mega-project.

A total of RM10.02 billion is as advanced payment, while the remaining RM9.67 billion is for progress payment.

The PH government said it will review the project after estimating that it will cost a whopping RM81 billion after taking into account land acquisition, interests, fees and other operational costs. THE MALAYSIAN INSIGHT