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Malaysia Rail Link orders suspension of ECRL works


KUALA LUMPUR: Malaysia Rail Link Sdn Bhd (MRL) has instructed China Communications Construction Ltd (CCCC) to suspend all works under the engineering, procurement, construction and commissioning contract (EPCC) of the East Coast Rail Link project with immediate effect.

Theedgemarkets.com reported on Wednesday that it had sighted a letter from MRL instructing CCCC to suspend all works under the EPCC on grounds of national interest, among others.

“During this period of suspension, you shall protect, store and secure the works against any deterioration, loss or damage.

“Additionally, you shall not remove any equipment, materials or any part of the works from the site, without our prior written consent.

“This suspension shall take effect immediately and will be in force until further instruction from us,” said the letter signed by MRL CEO Datuk Sri Darwis Abd Razak.

The ECRL project was one of the mega projects that came under scrutiny following the change of government for its cost that was described as highly inflated. Finance Minister Lim Guan Eng put the total cost of the ECRL at RM80.92bil after taking into account land acquisition, land interest fees and operational costs.

Apart from the cost, the project came under criticism for unfavourable terms in the agreement, where CCCC is allowed a 15% upfront payment of the total project cost of RM66.78bil as “mobilisation fee”.

Lim said in a statement on Tuesday that based on the figures and feasibility studies of the project, the ECRL project would only become financially viable if there were a drastic price reduction of the project by the CCCC. 

Construction , Economy

   

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