ECRL cost can be reduced if scaled down, say experts

Malaysia and China are expected to review the matter diplomatically and avoid international arbitration

By ALIFAH ZAINUDDIN / Pic By MUHD AMIN NAHARUL

THE government can reduce the scale of the RM81 billion East Coast Rail Link (ECRL) to slash the overall cost of the project, said experts.

Under the current arrangement, the 688km rail line is expected to stretch from Port Klang all the way to Pengkalan Kubor in Kelantan once completed — over 50km longer than its initial plan.

Institute for Democracy and Economic Affairs director of research and development Laurence Todd told The Malaysian Reserve (TMR) that the most “realistic” option to consider at this juncture is to cut down on planned extensions to the line or reduce the number of stations.

The cost of the major rail project has spiralled by nearly 50% higher than the previous government’s estimate of RM55 billion.

This came on the back of multiple extensions made to the first agreement which was signed in November 2016 with state-owned China Communications Construction Co Ltd.

The original scope of the project was to build a rail line from the Integrated Transport Terminal (ITT) Gombak in Selangor to Wakaf Baru in Kelantan, at a cost of RM46 billion.

Subsequently, the previous government signed two additional agreements with CCCC in 2017 to extend the line from ITT Gombak to Port Klang, as well as from Wakaf Baru to Pengkalan Kubor for RM9 billion and RM1.28 billion respectively.

In August, the Cabinet approved to upgrade the ECRL to a double-tracking project which would cost an additional RM10.5 billion — bringing the total construction cost to RM66.78 billion.

However, Finance Minister Lim Guan Eng said the final cost of the ECRL is RM81 billion, notwithstanding operational costs which remain undetermined.

“The government could also try to renegotiate the interest terms of the loan. These procurement processes were not transparent, so the government has a mandate to conduct these reviews. This is an important part of the reform,” Todd said.

Meanwhile, economist Prof Dr Yeah Kim Leng said the new Pakatan Harapan government should look at building the project in stages and putting certain sections on the backburner.

“Another way is to relook at the overall feasibility of the project and build sections that are justified economically, in terms of its utilisation.

“We can connect to Kuantan Port first and not all the way to Port Klang, unless they can back it with strong projected volumes. The overall economic feasibility needs to be considered,” he told TMR.

Yeah’s suggestion is in line with the Selangor state government’s objection on the rail link from ITT Gombak to Port Klang.

The state’s objection is principally based on Selangor’s application to establish the 16km-long Klang Gates Quartz Ridge as a Unesco World Heritage Site.

Completing the Gombak- Port Klang link would guarantee the failure of Selangor’s application.

Yeah said both Malaysia and China are expected to review the matter diplomatically and avoid international arbitration, given the long-established friendly ties of both countries.

Prime Minister (PM) Tun Dr Mahathir Mohamad has made two official overseas trips to Japan and Indonesia so far, and has yet to visit his counterpart in Beijing.

Yeah believes it is not necessary for the PM to meet President Xi Jinping to discuss new terms for the ECRL, but said preliminary renegotiations are expected between both governments.

“The PM’s (eventual) visit to China can be used to finalise the agreement. The government can announce the final cost of the project, and whether to proceed, postpone or even cancel the project. That could be one of the key objectives of the visit,” he said.