THE construction cost for Phase 1 and 2 of the East Coast Rail Link (ECRL) project has been reduced to RM44 billion under a new deal agreed with China, said the Prime Minister’s Office today.

The statement said the new cost is a reduction of RM21.5 billion from its original cost of RM65.5 billion. 

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

As part of the renegotiated deal, Malaysia Rail Link Sdn Bhd (MRL) today signed a supplementary agreement with China Communications Construction Company Ltd to start the resumption of the project.

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

“This was achieved after months of negotiations between the companies involved as well as the governments of Malaysia and the Republic of China,” said the PMO.

More details on the improved deal will be provided by Prime Minister Dr Mahathir Mohamad on Monday.

The announcement today ends months of uncertainty over the future of the China-backed project.

Special envoy Daim Zainuddin led the negotiation on behalf of the Malaysian government. He is in Beijing now to conclude discussions. 

Dr Mahathir suspended the project shortly after Pakatan Harapan took over the government last May, citing its exorbitant cost and “unfair” terms agreed upon by his predecessor Najib Razak.

Putrajaya had hinted it would cancel the project, but retracted its stand when faced with a huge cancellation fee.

The 688-kilometre rail link was estimated to have cost the government more than RM130 billion, but Daim had told media that negotiators were close to agreeing to a smaller sum under new terms. – April 12, 2019