Putrajaya cancels ECRL contract with China firm, says report

(FMT) – Putrajaya today cancelled the East Coast Railway Link (ECRL) contract with China Communications Construction Company (CCCC) today, according to The Straits Times (ST).

The ST report, quoting sources, said Putrajaya was now seeking a new contractor to build the ECRL, but at half the original estimated project cost of RM81 billion.

Work on the 688km railway line linking the east and west coasts of Peninsular Malaysia was suspended last July as part of the new Pakatan Harapan administration’s review of mega projects undertaken by the previous government.

EARLIER REPORT: ECRL will go on after all, says Daim

The ST report said since then, negotiations to reduce the project cost – pegged at RM55 million when the plans were launched in November 2016 – continued with CCCC. Government adviser Daim Zainuddin was leading the talks.

It said Putrajaya laid down a maximum cost of RM40 billion and asked for more local products and services to be included in the works. However, CCCC could not meet these requirements, resulting in negotiations coming to an end.

CCCC did not respond to a request for comment by the ST.

However, the Malay Mail reported Daim as saying earlier today that Malaysia was still in talks with China over the ECRL project.

“Negotiations are still going on ECRL. We hope to finalise this as soon as possible,” Daim told a press conference here after the Defence Ministry’s inaugural Perwira dialogue here.

The ECRL – meant to be a land bridge linking Kuantan Port with Port Klang that would allow shipped cargo to bypass Singapore – was touted as a game-changer when the project was launched.

Construction sites along the 12-passenger station route have been left abandoned since the stop-work order was issued in July, the ST reported.

CCCC was originally awarded the engineering, procurement, construction and commissioning contract for the ECRL, which was to be funded by Malaysia taking a soft loan from Export and Import Bank of China (Exim) to cover 85% of the cost. The remaining sum was to be raised from local bond issues.

Two pipeline projects with China costing RM9.3 billion were earlier cancelled after the government found that only 13% of the works had been completed despite nearly 90% of the project sum being paid out.