MRL’s ECRL project resumption done on transparency and accountability basis

The rail company wishes to point out that the improved deal for the ECRL project is rakyat-centric and has resulted in a win-win situation for all parties

By SHAHEERA AZNAM SHAH / Pic By BLOOMBERG

The resumption of the 640km East Coast Rail Link (ECRL) project was recently reviewed on a basis of transparency and accountability, Malaysia Rail Link Sdn Bhd (MRL) said.

MRL, being the project owner, also stressed that the renegotiation had resulted in a win-win situation which benefits both Malaysia and China.

“MRL wishes to point out that the improved deal for the ECRL project is rakyat-centric and driven by transparency and accountability.

“What is pertinent is that the renegotiation of the ECRL project had resulted in a win-win situation that mutually benefitted Malaysia and China,” it said in a statement
yesterday.

Last month, the government managed to reduce the ballooning cost of the ECRL project by RM21.5 billion, or 33% of its original cost, to RM44 billion — in addition to the increased participation of local contractors in the project’s civil works.

MRL said both the government and the company have never claimed that the 33% savings was a result of “overpricing”.

“It is noteworthy to mention that neither the government, nor MRL have claimed that the savings of RM21.5 billion for the improved ECRL project were purely from the element of ‘overpricing’.

“In fact, this was not the basis of the negotiations with China at all,” it said.

“MRL would like to stress that Malaysia entered into negotiations with China on a cooperative basis to find ways to reduce the cost of the ECRL without losing the essence of the rail network.

“Both countries chose to enter the negotiations in the spirit of diplomatic goodwill, with the aim of achieving the construction of the ECRL at a lower cost,” it added.

The statement was made in response to an opinion piece which was published by an online portal recently.

The firm acknowledged that the main concern for the project was the hefty development cost and the government had negotiated between pursuing with the project’s termination cost of RM21.78 billion, or proposing a more equitable deal.

“The government had to work within the constraints of the existing engineering, procurement, construction and commissioning (EPCC) agreement for the ECRL that was inked between MRL and China Communications Construction Co Ltd (CCCC) back in November 2016.

“As the government’s main concern was always the high cost of the ECRL, it was then decided for a renegotiation of the EPCC agreement with CCCC and the government of China for a more equitable deal and with the rakyat in mind,” it said.

The project owner also clarified that Tun Daim Zainuddin, who was the special envoy of the prime minister to head the ECRL negotiation, was not the sole negotiator for the project.

“MRL would also like to point out that Daim did not have the sole responsibility to undertake the negotiations of the ECRL with CCCC, or China.

“Although Daim was the chief negotiator for the ECRL task force, the task force members that were involved in the negotiation process also comprised senior officials from the Attorney General’s Chambers, Ministry of Finance, Ministry of Transport and MRL, among others,” it said.

MRL said a new feasibility study and environmental impact assessment on the realigned track is expected to commence in the third quarter of 2019 as the entire rail alignment would have been detailed out.

“MRL would like to highlight that the renegotiations were conducted on the premise that the original EPCC agreement is still in place.

“In short, it was not a negotiating process to reach a new EPCC agreement, but to facilitate the resumption of the ECRL via the supplementary agreement that was inked on April 12, 2019, in Beijing.

“This itself negated the need for a new feasibility study since we were working on the premise to avoid paying a termination fee at a staggering RM21.78 billion,” it added.