No go for ECRL at RM81b, unless cost goes down

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KUALA LUMPUR: The Government will implement the East Coast Rail Link (ECRL) project only after a significant cost reduction is obtained. 

The Finance Ministry said on Tuesday the final cost of the ECRL project is RM81bil and it does not include operating costs.

“Based on the above facts and figures, as well as the feasibility studies of the project, we expect that the ECRL project will only become financially and economically feasible if there is a drastic price reduction of the project by the CCCC. Discussions on cost will be held with the contracting parties and others involved in the project,” Finance Minister Lim Guan Eng said in a statement. 

Also disclosed in the statement is that Selangor state government had strong objection towards the ECRL project, especially with respect to the rail link from Integrated Transport Terminal (ITT) Gombak to Port Klang.

The Selangor state government’s objection is principally based on Selangor’s application to establish the 16km-long Klang Gates Quartz Ridge, which is the longest of its kind in the world, as a UNESCO World Heritage Site. Completing the Gombak-Port Klang link would guarantee the failure of Selangor’s application

“Only after a significant price reduction on the ECRL is obtained, will the Federal Government enter into discussions with the Selangor state government on the merits of the ECRL project as compared to the possible UNESCO World Heritage Site listing,” Lim said. 

To recap, the ECRL project was first approved by the Cabinet on Oct 21, 2016 while the Engineering, Procurement, Construction and Commissioning Agreement was signed with China Communication Construction Company (CCCC) on 1 November 2016. 

The original project scope was to build a rail line from the ITT Gombak in Selangor to Wakaf Bharu in Kelantan at a cost of RM46bil.

On May 13, 2017, the previous administration signed an additional agreement with CCCC to carry out Phase 2 of the project, which was to extend the line from ITT Gombak to Port Klang for RM9bil.

Earlier on May 3 May, 2017, the Cabinet approved the northern extension of the project from Wakaf Bharu to Pengkalan Kubor in Kelantan, for the value of RM1.28bil.

Subsequently on Aug 23, 2017, the Cabinet further approved the upgrading of the ECRL to a double-tracking project which would cost an additional RM10.5bil.

Based on these figures, the basic cost of construction of the 688.3km rail line amounts to RM66.78bil.

However, the total cost of ECRL will be RM80.92bil after taking into account land acquisition, interest, fees and other operational costs.