Rail link project may resume on smaller scale: Mahathir

PETALING JAYA • The East Coast Rail Link (ECRL), an ambitious project suspended last year, could resume on a smaller scale if China agrees to the move, Prime Minister Mahathir Mohamad was reported by Malaysian media as saying.

He said both countries are still in talks on the matter and have not arrived at a good solution.

"What we are trying to do is to ensure that we will not spend much money, while China will not suffer a loss," Dr Mahathir told the Chinese-language Sin Chew Daily in an interview on Monday.

The interview was picked up by the Malaysiakini news site yesterday.

The 688km rail link, if built, would connect Port Klang in Selangor to towns in Pahang, Terengganu and Kelantan states, before ending in Tumpat near the Thai border in Kelantan.

Malaysia is in a dilemma between terminating the project or continuing with it, with either option entailing huge financial costs, said Dr Mahathir. Therefore, Malaysia will seek to amend the project or other alternatives, he added.

FINDING A COMPROMISE

What we are trying to do is to ensure that we will not spend much money, while China will not suffer a loss.

MALAYSIA PRIME MINISTER MAHATHIR MOHAMAD, on negotiating with the Chinese to find a good solution.

"We are negotiating - formally or informally - with them (the Chinese). To them, this is a profitable contract, so they are reluctant to make changes," he said.

Before the May 9 general election last year, the now-ruling Pakatan Harapan alliance led by Dr Mahathir had vowed to terminate the ECRL project, as it said the contract and loan terms were unfavourable to Malaysia.

 
 
 

"But this is not easy, as we were bound by the contract and could not terminate the project easily, as we have no money to pay China... We have paid a lot of money to China after the postponement," he said.

The RM81 billion (S$26.6 billion) ECRL project, suspended last July, was approved by the Cabinet under then Premier Najib Razak in October 2016. The construction was to be handled by China Communications Construction Company (CCCC), while the financing was to be provided by the Export-Import Bank of China (Exim Bank of China).

Malaysia would be able to secure part of the loan from the Exim Bank of China on the condition that the CCCC builds the railway.

Dr Mahathir said the ECRL is a waste of money, as the government would not get any returns from the rail project and there is no way for Putrajaya to tax the concessionaire.

A version of this article appeared in the print edition of The Straits Times on January 03, 2019, with the headline 'Rail link project may resume on smaller scale: Mahathir'. Print Edition | Subscribe