The government has yet to finalise the direction for the East Coast Railway Link (ECRL) project, and is dependent on discussions currently underway.
Finance Minister Lim Guan Eng said the Selangor state government had opposed the project as the rail network from Gombak to Port Klang would impact the application for the 16km-long Klang Gates Quartz Ridge, which is the longest of its kind in the world, as a UNESCO (United Nations Educational, Scientific and Cultural Organisation) World Heritage site.
“If the government intends to continue with the project, comprehensive research has to be undertaken from the aspect of getting the agreement of the Selangor state government, the scope, specifications and implementation method. So that, the overall cost can be reduced and also will lighten the federal government’s financial burden,” he said at the Dewan Rakyat yesterday.
According to Lim, the ECRL project’s yearly operational expenditure (opex) is estimated to be between RM600 million and RM1 billion.
“Don’t talk about capital expenditure. We cannot even recover the yearly expected opex and this is a major issue,” he said, emphasising the project must be reviewed.
“Or else this ‘mega project’ could saddle the country with a ‘mega debt’ burden,” he added.
On the notice of suspension of works by the government to China Communications Construction Co Ltd, he said it was issued on the Attorney General’s advice.
“It is necessary for us to take such action. If we decide to stop the project, it would reduce the cost borne by the government.”
“If this should happen however, there is a strong possibility of it being subject to a legal process to determine the compensation amount to be paid,” added Lim.
He was responding to Datuk Seri Dr Ismail Abd Muttalib (BN-Maran) who wanted to know the latest status of ECRL, as well as justification for the cost rising from RM55 billion to RM70 billion.
Lim also said after taking into consideration the land acquisition costs (RM2.5 billion), working capital (RM50 million) and other opex (RM500 million), the overall development cost was RM69.83 billion.
“As such, the actual ECRL project cost is RM80.92 billion and this comprises a development cost of RM69.83 billion and financing cost of RM11.09 billion.
“The costs related to financing of RM11.09 billion include the payment of interest, sukuk coupon, commitment fee and management fee during construction (interest on loan cost after construction is not taken into account yet).
“The stated costs are not new as the overall estimated costs are from the previous government and not publicly made known,” he added. — Bernama