Possible restart of ECRL

Meanwhile, BPMB will clear its books soonest possible and continue to balance its role and standards

By NG MIN SHEN / Pic By ISMAIL CHE RUS

China has offered to reduce the cost of the controversial East Coast Rail Link (ECRL) which may reignite the shelved project previously costing about RM81 billion.

The 688km rain network, linking the West and East coasts of Peninsular Malaysia and passing through Banjaran Titiwangsa, had been a hot button for Kuala Lumpur (KL) and Beijing.

China Communications Construction Co Ltd was awarded the multibillion contract, but the project had been halted after the new Pakatan Harapan government took control of Putrajaya in May last year.

Malaysia and China have been in talks to reignite the project as Beijing sees the project as a critical component of China’s “One Belt, One Road” agenda. Malaysia’s shelving of the ECRL had already caused concern as other countries could follow suit.

But recent reports suggested that both countries are willing to seek a compromise as China continues to be a key trading partner of KL.

“I think the Chinese government has offered reductions. We are still discussing and we believe these discussions will be carried out quickly — hopefully in time for Prime Minister Tun Dr Mahathir Mohamad’s visit to China at the end of April,” Finance Minister Lim Guan Eng (picture) said at the launch of the Industry Digitalisation Transformation Fund (IDTF) in KL yesterday.

Lim expressed his support for Dr Mahathir’s statement on the issue, adding that with a reduction in cost, “there is hope that this project can be put forward”.

Dr Mahathir said last week that while Malaysia will continue to be involved in the railway project — if the cost is agreeable — a price tag of over RM55 billion would not be affordable as it would result in a total cost of RM140 billion, including interest costs.

He said Malaysia would require 30 years to repay the loan to finance the project, an unlikely option as the country already has to shoulder the 1Malaysia Development Bhd debt.

Under the previous administration, the initial basic construction cost of the project was RM66.78 billion.

Lim revealed in July last year that the final cost of the project would balloon to RM80.92 billion after taking into account land acquisition, interest, fees and other operational costs. Since then, all work on the project has been suspended, as requested by project owner Malaysia Rail Link Sdn Bhd.

Council of Eminent Persons chairman Tun Daim Zainuddin said last month that he would be meeting with a Chinese negotiation team in Malaysia to discuss the project.

Prior to Daim’s comment, a Reuters report citing sources said China had offered to cut the construction cost of the ECRL by half.

Meanwhile, Bank Pembangunan Malaysia Bhd (BPMB) — a development financial institution owned by the government — will clear its books “as soon as possible” and continue to
balance its developmental role and prudential standards.

Its chairman Datuk Zaiton Mohd Hassan said the bank will look at companies’ credit standards and credit processes going forward, before approving any loans.

“We are now formulating our plans for 2019. We have an incoming CEO, (so) we will finalise this when the CEO, board and management have sat together and formulated our way forward,” she said.

The development bank in the past had been linked to loans approvals to politically connected parties.

Lim yesterday endorsed Zaiton to lead the bank. She was appointed as BPMB chairman last month. The Ministry of Finance had approved her appointment.

“She is coming in to clean up the bank. I believe you all know the Auditor-General’s reports and there are issues related to the bank.

“We feel we need a new person in charge, and when you want to clean up a bank, the right person to do the job is sometimes a lady. We have every confidence in Zaiton’s ability to turn around the bank,” he stated.

BPMB is in charge of the IDTF — a RM3 billion fund first unveiled in Budget 2019, aimed at supporting the government’s goal of improving productivity and advancing the domestic manufacturing sector, by providing financing to companies looking to adopt Industry 4.0 technologies.