ECRL Will Proceed But At A Lower Price And Better Terms

28 Jun 2018

The ongoing East Coast Railway Line (ECRL) project can continue if Malaysia can obtain more favourable terms in the contract. If this is not possible, its huge cost should be slashed, reported The Edge.

“If we get better terms, then of course we will continue… If we cannot break the contract, then we have to reduce the costs,” said Prime Minister Tun Dr Mahathir Mohamad on Monday (25 June).

“The previous administration borrowed RM55 billion (for this project) from China, we don’t think it should cost RM55 billion. Then there’s the issue that they give the contract to a Chinese company, and they bring in workers and everything from China, so what is there for Malaysia? We must gain something for Malaysia.”

85 percent of the RM55 billion is being funded through a loan from the Export–Import Bank of China, while 15 percent is being shouldered by the Malaysian government, with China Communications Construction Co appointed as ECRL’s main contractor.

Previously, Finance Minister Lim Guan Eng revealed that Malaysia has already spent RM20 billion for the 688km rail project. However, he declined to divulge the contract’s terms, insisting that it should be renegotiated “behind closed doors”.

In May, the Council of Eminent Persons, which is advising the new government, said that the RM55 billion price tag is only for the first part of the ECRL, excluding the RM11 billion for the second phase and the 3.25 interest for the Chinese loan.

Following Mahathir’s announcement, T7 Global said that it is still interested in continuing its participation in the East Coast Railway Line (ECRL) despite the potentially lower funding as long as the Kuala Lumpur-based engineering firm “can make a decent profit.”

T7 Global Chairman Datuk Seri Dr Nik Norzrul Thani also welcomed the government’s review of the ECRL project and is awaiting their final decision.

“Pricing is very important. For that, we must make sure that we’re efficient. We’re quite enthusiastic about the review, because we have always been competitive. We have never relied on government contracts.”

In March, T7 teamed up with bumi company CMC Engineering and Terengganu state-linked firm Eastern Pacific Industrial Corp Bhd (EPIC) to undertake the Terengganu portion of ECRL.

Image sourced from Edge Property

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