ECRL: Project price aside, Govt concerned over 'very high' operational cost

KUALA LUMPUR: The Government's review of the East Coast Rail Link (ECRL) is not confined to construction cost, but also the viability of maintaining the rail network, says Finance Minister Lim Guan Eng.

"It must be noted that even if the rail project is completed, the operational cost will be very high to cover the project cost.

"Don't even talk about capital expenditure, as we can't even cover the operational cost, which is estimated to be RM600mil to RM1bil annually," he said when replying a supplementary question by

Wong Kah Woh (PH-Ipoh Timur) in Parliament today. (Aug 15).

Lim said this was another crucial factor why the Government decided to review the ECRL project.

"This is a huge issue, and it is clear why a review is needed to avoid the Government being straddled with a huge debt.

"It is a mega project that will result in a mega debt," he added.

He informed lawmakers that negotiations between the Government and Chinese project contractor, China Communications Construction Co Ltd (CCCC), was still on-going.

Although there had been some headway in negotiations, following the Prime Minister's special representative Tun Daim Zainuddin's recent visit to China, Lim noted that no common point had been reached between the parties.

"The viability and feasibility of the project remains the biggest question," he stressed.

Earlier when answering a question by Datuk Seri Dr Ismail Abd Muttalib, Lim assured that the Government would adhere to the provisions under the Land Acquisition Act for land that had been acquired for the ECRL.

On the fate of project staff who were retrenched, Lim said the Government would assist only locals affected following the suspension of the project.

He said the Government decision to suspend the project and issue an immediate stop work order on July 3 followed the advice from the Attorney-General.

He said this was done to avoid the Government having to make progressive payments to the Chinese contractors.

Lim told the House that the actual cost of completing the project was RM80.92bil and not RM55bil as announced by the previous Government.

So far, he said the Government, through project owners Malaysia Rail Sdn Bhd, had paid RM19.68bil to CCCC as progressive payment for completing 15% of the project.

The 688km ECRL project was launched on Aug 9, 2017 and was scheduled for completion in 2024.

Under the project, Malaysia raised RM55bil from China, with 85% of the loans provided by the Export-Import Bank of China and 15% by Islamic bonds.

The first phase of project was to connect Gombak and Tumpat, Kelantan, while the second phase links Gombak and Port Klang.

It is estimated that some 1,000 staff out of 2,250 had been laid off after the project was suspended in early July.- Star