THE cabinet has decided to terminate the East Coast Rail Link (ECRL) project after considering the high annual interest that the country would have had to bear, said Economic Affairs Minister Azmin Ali.

Azmin said the cabinet decided on Thursday to scrap the project, as RM500 million in interest would have had to be paid annually were it to continue.

“The cabinet made the decision because the cost to develop ECRL is too high, and we do not have the financial capability at this moment,” Azmin told reporters today.

“And if this project was not cancelled, the interest that the government would have to pay reaches to nearly half a billion ringgit.

“This is something that we won’t be able to do,” he said.

On Thursday, prime minister Dr Mahathir Mohamad said he was unaware if a contract awarded to a China company for the project had been terminated.

The previous government had inked a procurement, construction and commissioning contract with China Communications Construction Co Ltd (CCCC) to develop the RM81 billion railway line, which would have connected Port Klang in Selangor on the west coast of the peninsula to Kelantan’s Pengkalan Kubor on the east coast.

When asked today about compensation to CCCC, Azmin said that it would be determined by the Finance Ministry.

“It is being looked into and being refined. The process had started before this,” he said.

“It will be determined by the Finance Ministry, which had carried out the due diligence to ensure that the cost (compensation) would not further burden the country’s financial situation today.”

Earlier this week, Council of Eminent Persons chairman Daim Zainuddin had said the ECRL might continue, as Malaysia is still negotiating with China over the project.

The government adviser was appointed as a special envoy to meet China’s Prime Minister Li Keqiang and other government officials in Beijing last year. – January 26, 2019.