PUTRAJAYA stands to recover RM10 billion in advance payments if the East Coast Rail Link (ECRL) project is cancelled, said Finance Minister Lim Guan Eng.

“The status of ECRL, however, is still undecided pending further negotiation to reduce the costs,” Lim told Parliament during the question-and-answer session today.

“But we stand to recover RM10 billion in advance payments if the project is cancelled.”

The Bagan MP was responding to Noh Omar’s (Tanjong Karang-BN) question on the status of the ECRL project.

Malaysia, via its subsidiary Malaysia Rail Link Sdn Bhd (MRL), has paid Chinese contractor China Communication Construction Company (CCCC) RM19.68 billion for the mega-project. A total of RM10.02 billion is as advanced payment, while the remaining RM9.67 billion is for progress payment.

The Pakatan Harapan government said it will review the project after estimating that it will cost a whopping RM81 billion after taking into account land acquisition, interests, fees and other operational costs.

“The payment bond of RM10.02 billion can be redeemed by MRL if the project is cancelled. Under the worst-case scenario, the federal government can recover RM10.02 billion out of the RM19.68 billion it has already paid,” said Lim.

He added that Malaysia has had four negotiation sessions with China since July. 

“But until now, MRL and CCC have not reach an agreement on suggestions to reduce the ECRL costs.”

Meanwhile, Lim said, the Selangor government has opposed the project as the rail line from Gombak to Port Klang will affect its application for Unesco world heritage status for the 16km Klang Gates Quartz Ridge.

“The ECRL link will definitely affect the Selangor government’s application,” said Lim.

The government issued a suspension notice to CCCC on July 3 and the project is suspended until further notice from the Finance Ministry. – October 22, 2018.