Malaysia's East Coast Rail Link back on track after government signs $14.5b deal with China

The signing for the resumption of the East Coast Rail Link was achieved after months of negotiations between China, Malaysia and companies that are involved. PHOTO: ST FILE

PUTRAJAYA (THE STAR/ASIA NEWS NETWORK) - Malaysia Rail Link and China Communications Construction Company have signed a supplementary agreement that will pave the way for the resumption of the East Coast Rail Link (ECRL) project.

The signing was achieved after months of negotiations between the companies as well as the governments of Malaysia and China, said the Prime Minister's Office (PMO) on Friday (April 12).

"We are pleased to announce that the construction cost of Phases 1 and 2 of the ECRL has now been reduced to RM44 billion (S$14.5 billion)."

"This is a reduction of RM21.5 billion from the original cost of RM65.5 billion."

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

The PMO also said that further details of the improved deal will be made known at a press conference next Monday.

Prime Minister Mahathir Mohamad is expected to give the press conference.

The project, part of China's Belt and Road Initiative, was among a number of large infrastructure projects put on hold by the Mahathir government after last year's elections. The government cited the nation's huge debt and the need to cut the cost of the ECRL and other projects if they were to go ahead.

According to earlier reports, Phase 1 of the rail line will be from Klang Valley to Kuantan, while Phase 2 will cover Kuantan to Kuala Terengganu.

The project's Phase 3 will see the rail line connecting Kuala Terengganu to Kota Baru and Tumpat.

Tun Daim Zainuddin, special envoy to the prime minister, arrived in Beijing on Friday to finalise the project with China, ahead of Tun Dr Mahathir's visit to the country.

Speaking in Beijing, Mr Daim said the ECRL would proceed with double-tracking, with the total distance reduced by 40km from the original length of 688km, and the cost per kilometre reduced from RM98 million to RM68 million.

He said the supplementary agreement was signed on Friday in Beijing. It is not a new agreement or contract, but an improved deal, he said at a press conference at the Malaysian embassy.

He said the stop at Gombak in Selangor has been cancelled. The ECRL will go from Kota Baru-Mentakab-Jelebu-Kuala Klawang-Bangi/Kajang-Putrajaya-Port Klang.

The Malaysia-China negotiations were only about the rail project and did not involve other issues including palm oil, he added.

He said the reduced cost would be easier to manage and ease the interest burden that must be paid.

Further details on the financing will be announced by Dr Mahathir next Monday.

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