KUALA LUMPUR: The East Coast Rail Link (ECRL) project will go ahead but the cost has been reduced significantly by RM21.50bil to RM44bil.
At RM44bil, this is a 32.8% reduction in the earlier cost of RM65.5bil.
The ECRL will be double track, starting from Kota Baru to Mentakab,Jelebu, Kuala Klawang, Bangi, Kajang, Putrajaya and ends in Port Klang.
Below is the statement issued by the Prime Minister's Office on Friday:
The Government of Malaysia welcomes the signing of a Supplementary Agreement (SA) between Malaysia Rail Link Sdn Bhd (MRL) and the China Communications Construction Company Ltd (CCCC), which will pave the way for the resumption of the East Coast Rail Link (ECRL) project.
The SA, which covers the Engineering, Procurement, Construction & Commissioning (EPCC) aspects of the ECRL, was achieved after months of negotiations between the companies involved as well as the Governments of Malaysia and the People's Republic of China.
We are pleased to announce that the construction cost for Phases 1 and 2 of the ECRL has now been reduced to RM44 billion, a reduction of RM21.5 billion, from its original cost of RM65.5 billion.
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.”
Earlier this week, CIMB Equities Research said ECRL’s construction cost could be significantly reduced by as much as 48% to RM35bil.
The research house had stated it expected a realignment of the 688km line will involve a rerouting to Negeri Sembilan.
CIMB Research had stated that unless a new rail line is built, it believes that rerouting the ECRL to Negeri Sembilan (from Gombak to Mentakab and vice versa) implies an alternative alignment away from the mountainous Titiwangsa Range and a likely integration with KTMB’s existing rail line in Negeri Sembilan.
Based on the original plans, 44 tunnels are to be constructed at various locations spanning over 50km. The longest tunnel (which is now likely to be scrapped) is the Genting Tunnel measuring 17.8km (37% of total tunnel length).
Companies under its coverage that have rail experience include IJM Corp, Sunway (via Sunway Construction) and WCT. An upside risk is larger-than-expected exposure of the ECRL project to local contractors.
StarBiz had reported the ECRL will adopt single-tracking instead of double-tracking as the passenger and freight traffic flow is expected to be low due to the sparse population and low investments in the states of Pahang, Terengganu and Kelantan.
The ECRL is of strategic importance to China because the Kuantan Port-ECRL-Port Klang route shortens its trading route and cuts the time it takes to travel to the west of Peninsular Malaysia while eliminating the need to use the Singapore Port.