Guan Eng: ECRL project has to be suspended due to mega debts

Lim Guang Minister of finance malaysia

KUALA LUMPUR:   The Pakatan Harapan (PH) Government will pay compensation if necessary on any losses incurred by the Malaysian workers following the suspension of the East Coast Rail Link (ECRL) early July this year, Minister of Finance Lim Guan Eng said.

He said, the workers are not employed by the Federal Government but by the China Communication Construction Company (CCCC). The suspension of ECRL project affects more foreign workers and compensations should be paid by CCCC.

“Under the Land Acquisition Act 1960, the government will own the land once compensations are paid to the land owners” he said to a question asked by Member of Parliament (Maran), Datuk Seri Dr. Ismail Muttalib in the question and answer session in Dewan Rakyat today.

Ismail said, due to the suspension of ECRL project, 2,000 workers have lost their jobs and thousand hectares of land were “frozen” after being identified as part of the project.

Ismail wanted to know whether the government will give any aid or compensation to those affected.

Earlier on Guan Eng said, the real cost of the ECRL project is RM80.92 billion. This involved development costs amounting RM69.83 billion and expenditure costs RM11.09 billion.

These costs he said will be incurred in building railways in Phase 1, Phase 11 and improvement phase amounting to RM66.78 billion. After taking into account the cost of land acquisition RM2.5 billion, work capital RM50 million and operational costs RM500 million; the whole development project will amount to RM69.83 billion.

Guan Eng elaborated on the costs in answering a question posed by Ismail of why the building costs of ECRL project increased from RM55 billion to RM70 billion.       

To a question posed by Wong Kah Woh (MP Ipoh Timor), of why the ECRL project was suspended and under review by the Federal Government, Guan Eng said, the government has suspended the project following the advice of the Attorney General. It was stopped to reduce the cost of work development.

“As of now the government through Malaysia Rail Link Sdn. Bhd. (MRL) has spent RM19.68 billion for deposit payment and RM10 billion for work development (RM9.67 billion) which are considered very high,” he said.

Guan Eng also mentioned that ECRL project is suspended as it is to be reviewed. However negotiations are still ongoing but no agreement has been made by both parties. Tun Daim Zainuddin was sent as a special representative to China and the position has become “closer” but the question of viabilities and feasibilities of the project is still the big question for the Federal Government.   

He added, even if the project is to be continued, it could not afford to bear the operational and capital expenditures which are too costly. Both costs would amount to RM600 million to RM1 billion per year.

“This mega project would also cause a mega debt for the Federal Government and as such it should be reviewed,” he said. – Malaysia World News.   


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