KUALA LUMPUR: The government has reduced the cost of the East Coast Rail Link (ECRL) project by RM21.5 billion.
The Prime Minister’s Office, in a statement today, said the original RM65.5 billion construction cost for Phase 1 and 2 had been reduced to RM44 billion.
It stated that the Supplementary Agreement between Malaysia Rail Link Sdn Bhd and the China Communications Construction Company Ltd, which covers the Engineering, Procurement, Construction and Commissioning (EPCC) aspects of the ECRL, was achieved after months of negotiations between the companies involved as well as the Malaysian and Chinese governments.
PMO said the Malaysian government welcomed the signing of the agreement which would pave the way for the resumption of the project.
“This reduction will surely benefit Malaysia and lighten the burden on the country’s financial position.
“Further details of the improved deal will be provided during Monday’s press conference,” the statement said.
News reports had previously suggested that the current renegotiation on the ECRL could see its construction price pegged at RM50 million to RM60 million per km, as well as a commitment by the Chinese government to buy Malaysian palm oil and bring in projects.
The ECRL project was approved by former prime minister Datuk Seri Najib Razak in October 2016.
Prime Minister Tun Dr Mahathir Mohamad had said that the government would be saddled with a RM130 billion debt if the ECRL project was implemented on current terms and conditions.