PUTRAJAYA will look at how it can renegotiate the East Coast Rail Line (ECRL) project, failing which it may terminate it, said Prime Minister Dr Mahathir Mohamad.

He said the deal was too costly for Malaysia and that it also included unfavourable conditions, such as scheduled payments.

“We want to negotiate to ensure that we don’t have to spend so much money because we can’t afford it,” Dr Mahathir said after chairing the weekly cabinet meeting at the Prime Minister’s Office today.

He said the government was still studying the ECRL contract and had not yet decided whether to scrap the project.

“We will study whether we can defer or terminate (it).” 

It was reported in The Malaysian Insight today that the government may have to pay up to RM22 billion if it wants to terminate the ECRL project. 

“We have also found that the contract also includes payments according to a specific timeframe. And as far as we can determine, the work done is much less than the payments that have already been made,” said Dr Mahathir. 

Unlike the high-speed rail (HSR) project from Kuala Lumpur to Singapore, the RM66 billion ECRL project is already 20% completed.

Less than a month after Pakatan Harapan took over, the government has already scrapped the HSR project, although it may have to pay a penalty of RM500 million. 

The practice of scheduled payments was also found in a newly uncovered scandal involving Finance Ministry subsidiary Suria Strategic Energy Resources Sdn Bhd (SSER), revealed by Finance Minister Lim Guan Eng yesterday.

The payments based on timeline milestones instead of the work’s progress resulted in RM8.3 billion paid to the China contractor, which was 87.7% of the project value, for only 13% of work done to build two gas pipelines. – June 6, 2018.