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East Coast Rail Link back on after Malaysia, China agree to slash cost by over 30%

East Coast Rail Link back on after Malaysia, China agree to slash cost by over 30%

Kota SAS, a new township for Pahang’s administrative centre, is one of the planned stations along the East Coast Rail Link. (Photo: Norbakti Alias)

KUALA LUMPUR: After months of negotiation, Putrajaya and Beijing have agreed to proceed with the East Coast Rail Link (ECRL) at a cost of RM44 billion (US$10.6 billion), slashing more than 30 per cent off the initial projected cost for a shorter route.

According to a statement issued by Malaysia’s Prime Minister’s Office (PMO) on Friday (Apr 12), a supplementary agreement was signed after talks involving the two governments and their respective companies.

“We are pleased to announce that the construction cost of Phases 1 and 2 of the ECRL has now been reduced to RM44 billion," said the statement.

“This reduction will surely benefit Malaysia and lighten the burden of the country’s financial position.”

The cost of the project has been reduced by RM21.5 billion from the initial figure of RM65.5 billion.

The supplementary agreement covers the engineering, procurement, construction and commissioning aspects of the ECRL, added the PMO.

“The new link is 648km, 40km shorter,” Mr Daim Zainuddin, the Malaysian prime minister's special envoy who was present at the signing ceremony was quoted as saying by The Star.

The cost is now RM68 million per km, instead of the previous RM98 million per km, he added.

He also said that the money saved will be enough to build two Petronas Twin Towers.

"It (the ECRL) will not go through Gombak. The revised line will be Kota Baru-Mentakab-Jelebu-Kuala Kelawang-Bangi/Putrajaya-Port Klang," Mr Daim was also quoted as saying by the New Straits Times.

READ: Businesses, residents hope Malaysia’s East Coast Rail Link will go ahead despite cancellation fears

READ: Commentary - The impasse over the East Coast Rail Link is hurting Malaysia’s credibility

More details will be made known at a press conference by Prime Minister Mahathir Mohamad next Monday.

Malaysian Prime Minister Mahathir Mohamad at a press conference on April 5, 2019. (File photo: Bernama)

Launched in 2017, the centrepiece project of China's Belt and Road programme in southeast Asia aimed to link Malaysia's east coast on the South China Sea with the busy waterway of the Malacca Strait on the west.

After returning to power in May 2018, Dr Mahathir, a critic of China's investments in Malaysia, vowed to renegotiate or cancel what he calls "unfair" Chinese projects authorised by his predecessor Najib Razak. 

He suspended the ECRL last July. In January, he said that Malaysia will be impoverished if the ECRL is constructed.

Dr Mahathir is expected to visit China later this month for the Belt and Road Summit.

In Beijing, foreign ministry spokesman Lu Kang told a regular news briefing that officials in both countries had maintained close communication on the project.

"We also hope that both sides can resume project construction at an early date, manage well this good situation, and expand areas of mutual benefit," he said.

Source: CNA/bernama/aw(tx)


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