Company says that a new article contained "baseless" allegation linking the project to two companies used by Jho Low.
The federal government has called for the ECRL project to be reviewed as being unnecessary.
PETALING JAYA: The owners of the East Coast Rail Link project have denied a news report linking the project to wanted Penang-born businessman Jho Low, who is sought for investigations into the financial scandal surrounding 1Malaysia Development Berhad.
Project owner Malaysia Rail Link Sdn Bhd said the article made “a baseless allegation” that the contractors, China Communications Construction Company Ltd, had been required to buy two construction companies linked to Jho Low for a total of US$315 million (RM1.25 billion).
“This information is completely incorrect and misleading. It is a baseless and irresponsible allegation,” the company said in a statement today.
“There is no contract between China Communications Construction and Malaysia Rail Link that stipulates this clause. Neither does this clause appear in the loan agreement between MRL and the Export-Import Bank of China.”
The news article, in The Edge weekly yesterday, had said that the ECRL contract contained a clause requiring China Communications Contruction to nominate an unrelated company to buy up 70% of Putrajaya Perdana Berhad, a construction and property development company, for US$244 million as well as 90% of the family-owned construction company Loh & Loh for US$71 million.
News reports in 2007 said Loh & Loh had been taken over purportedly by “a consortium of Malaysia and Middle Eastern interests”.
The Edge has previously reported that Jho Low made RM516 million in a complex series of transactions by flipping the ownership of Putrajaya Perdana and Loh & Loh that also involved a bank linked to the family of Sarawak head of state Taib Mahmud.
Malaysia Rail Link said today that the ECRL project was undertaken based on a government to government agreement between Malaysia and China, which called for a special purpose vehicle company to oversee implementation. This led to Malaysia Rail Link being incorporated in September 2016.
The company said it had purview only over the contract with CCCC and the loan agreement with Export-Import Bank of China.
The future of the RM55 billion East Cost Rail Link is in doubt after the new federal government led by Prime Minister Mahathir Mohamad said the project was not necessary and was being reviewed.
Malaysia Rail Link said that about 14.33% of the project had been undertaken, involving setting up camps in all eight sections of the project, land acquisition, site clearing and construction of road access.
Construction works for seven tunnels in Pahang and Terengganu had begun, as well as preparatory work for a 16.3km rail tunnel through the Genting Highlands between Bentong and Gombak. -FMT
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