No land was given for free to reduce ECRL cost

If there is any additional (terms) in the contract, it will have to go through the Cabinet, says Lim

by AFIQ AZIZ / pic by ISMAIL CHE RUS

The government has not given any land to China Communications Construction Co Ltd (CCCC) for “free” as part of the East Coast Railway Link (ECRL) renegotiation deal.

Finance Minister Lim Guan Eng said neither the Ministry of Finance (MoF) nor the Cabinet has been informed that around 1,821ha was traded off to the Chinese rail firm in exchange for RM21.5 billion reduction cost for the ECRL.

“I do not think that is correct, as we look into the contract itself, if there is any additional (terms) you will have to go through the Cabinet.

“So far, I think we have not been informed that additional 4,500 acres (1821ha) of land has been given for free,” Lim told the press after witnessing the signing of an agreement for the Industrial Collaboration Programme (ICP) between the government of Malaysia, Bombardier Hartasuma Consortium (BHC) and Prasarana Malaysia Bhd yesterday.

“I don’t think so, but if it is paid then that’s a different question, but given for free, definitely not true,” he reiterated. The minister also said if the land is to be given under the transit-oriented development (TOD) procedure, such as for mass rapid transit and light rail transit (LRT) projects, the ground will not be given for free.

He said this when asked to comment on a recent blog post, which alleged that the land comprising seven industrial parks nearby ECRL stations would be swapped and developed by CCCC.

The blog post also stated that Malaysia’s special envoy to China, Tun Daim Zainuddin, had failed to disclose the details of the renegotiated terms.

Lim, however, said the details of the ECRL renegotiated terms are expected to be revealed soon.

Meanwhile, BHC is expected to source 27 new train sets for Kelana Jaya LRT line and conduct a midlife refurbishment for Prasarana’s current rolling stock in the RM2.1 billion worth of contract.

The new cars, which have a contract value of RM1.7 billion, are expected to be delivered within the next five years. The first unit will be ready by March next year.

Lim said BHC has committed to maximise the usage of local content at a minimum of 35%, or about RM600 million.

“This approach is a catalyst for local industry players to be part of Bombardier’s global strategic cooperation and contribute to Malaysian economic and industrial growth.

“Furthermore, hundreds of local job opportunities will be created over the next four years through this ICP implementation,” he said.

The ICP initiative, overseen by Technology Depository Agency Bhd — an MoF agency that was created to ensure all government’s high value procurements are leveraged to support local industry.

All government procurement activities that exceed RM50 million related to supplies, services and works awarded to foreign companies will trigger the ICP policy, while the threshold for local companies was set at RM100 million.

Separately, Lim assures that any bond guarantees by the government, including those by 1Malaysia Development Bhd (1MDB), would be served accordingly.

He was responding to a news report stating that the government may convert the Retirement Fund Inc and Lembaga Tabung Haji bonds worth RM2.4 billion into equity stakes in the Bandar Malaysia development, as part of the efforts to reduce the 1MDB debt burden.

“There is nothing to worry, the ones who should worry are the MoF and the government because we guarantee their loans, so we assure they are getting their money.

“The government needs to find the money to repay all the loans related to 1MDB, while the government gets nothing in return in terms of value,” he said.