Jomo’s right, but ‘national considerations’ at stake in axing ECRL, says Guan Eng

Finance minister Lim Guan Eng says it is better to cancel the ECRL but it is also important to keep good relations with China.

KUALA LUMPUR: Finance Minister Lim Guan Eng said he agreed with prominent economist KS Jomo that it’s better to cancel the controversial East Coast Rail Link (ECRL) but that there were “a lot of national considerations at stake” in making such a decision.

“I definitely do not disagree with Dr Jomo but it involves relations between Malaysia and China, our biggest trading partner,” he said.

Lim was asked if Putrajaya would talk to China on cancelling the project, as proposed by Jomo. He was also asked to respond to court evidence from the 1MDB trial key witness Amhari Efendi Nazaruddin that the ECRL project was mooted to bail out 1MDB.

Jomo, currently a research adviser at Khazanah Research Institute, had said Malaysia had a “huge opportunity” to renew the topic in terms of the project’s integrity and viability as building the 648km railway might cost the government billions.

Putrajaya’s latest estimate is that the project would cost RM44 billion.

Jomo had said the ECRL project, to connect Kelantan to the Klang Valley, would be under-utilised and heavily subsidised, forcing future generations to bear the cost as well.

“There are pros and cons,” Lim said, adding that it would be good to keep healthy relations with China.

It had to be noted, Lim said, that “the whole project has been renegotiated with the Chinese government and the Chinese have also agreed to cancel the multi-product pipeline”.

The two pipelines in Kedah and Sabah, worth RM8.3 billion were awarded to China Petroleum Pipeline Bureau (CPP) in November 2016. The Barisan Nasional government had paid 88% of the contract value despite only 13% of the work having been completed.

When the two pipeline projects were suspended, some of CPP’s bank accounts were frozen.

In July 2019, Prime Minister Dr Mahathir Mohamad said Malaysia had seized more than RM1 billion from CPP over incomplete pipeline projects.

On April 12, Malaysia Rail Link Sdn Bhd and China Communications Construction Company Ltd (CCCC) had signed a Supplementary Agreement (SA) to reduce the cost of the ECRL.

Under the new agreement, construction of Phases 1 and 2 of the ECRL will be resumed at a cost of RM44 billion, a reduction of RM21.5 billion from the original projection of RM65.5 billion.

The rail line will have a new alignment, which cuts its distance by 40km to 648km and reduces the cost per kilometre from RM98 million to RM68 million. - FMT