Malaysia accepts 14% cost increase in China-led rail project, taking longer route

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KUALA LUMPUR: Malaysia said on Monday that it had accepted an increase of nearly 14% in the estimated construction cost for the proposed East Coast Rail Link (ECRL), part of China's Belt and Road Initiative, as the length of the route would be slightly longer.

The Malaysian unit of China Communications Construction Co Ltd, CCC-ECRL, is contracted to build the line.

First proposed in 2017, the project linking the east and west coast of the Malaysian peninsula was suspended a year later after an election brought veteran leader Mahathir Mohamad back to power.

Mahathir put the project on ice because of allegations of corruption and in order to discuss the price, however, he lost power a year ago.

Before Mahathir's coalition government fell apart, it agreed to new terms for the project, slashing the estimated cost by a third to 44 billion ringgit ($10.63 billion), while the length of the route was shortened to 640 km from 688 km.

The latest revision, agreed by the government led by Prime Minister Muhyiddin Yassin, increase the cost to 50 billion ringgit ($12.08 billion), and take the length back up to 665 km.

Transport Minister Wee Ka Siong said in a statement that the changes to the project enhanced "the viability of the ECRL project and provide further economic, environmental, and social benefits."

The ministry said construction was in full swing and the project linking the east coast city of Kota Bharu to Port Klang on the west coast can still be completed within seven years, allowing services to commence 2027 despite the changes to the route. As of last month, 21.4% of the project had been completed, it said. - Reuters