Source: Govt chose to axe rail project a month after rise to power

Replica of trains for the East Coast Rail Link project are shown to the public at the Expo Terengganu 2018. -Bernama filepic

PETALING JAYA: The Cabinet decided to terminate the East Coast Rail Link (ECRL) project a month after Pakatan Harapan came into power and not during its Thursday’s meeting as reported by certain media.

Highly-placed government sources said during the meeting, the Finance Ministry had merely briefed the ministers on the issue.

“The decision to terminate was made earlier, not on Thursday. The Cabinet had a sort of briefing on the matter from the Finance Ministry,” said the sources.

The project comes under the purview of the Finance Ministry.

On Thursday, Sin Chew quoted a Cabinet source as saying that the Cabinet decided to scrap the project during its Thursday meeting.

According to the report, the Cabinet did not discuss the issue of compensation with China Communications and Construction Company (CCCC) – the project contractor.

The project was approved by the Barisan Nasional government in October 2016 while the engineering, procurement, construction and commissioning agreement was signed with CCCC the following month.

The 688km project was expected to be completed in 2024 at a final cost of RM81bil.

The government sources added that the “decision to scrap” was made in June as the whole project was deemed too expensive for a government saddled with debts.

They further explained that the Cabinet also wanted to reduce the compensation to be paid to CCCC to half the amount.

“The compensation will be arbitrated,” added the sources, without stating who would handle the arbitration process.