Malaysia rail project to resume after China agrees to cost cut

Malaysia's new government stopped work on 688km project last year, amid concern about hefty price tag.

    Work on the East Coast Rail Link was suspended when Malaysia's new government took power in May last year, and is now being resumed [AP Photo]
    Work on the East Coast Rail Link was suspended when Malaysia's new government took power in May last year, and is now being resumed [AP Photo]

    Kuala Lumpur, Malaysia - Malaysia will resume work on the multi-billion dollar East Coast Rail Link (ECRL) after months of negotiations with the China Communications Construction Company (CCCC) and the Chinese government brought the cost down by a third.

    The cost of the first two phases of the line was reduced from 65.5 billion Malaysian ringgits ($15.9bn) to 44 billion ($10.6bn), the Prime Minister's Office said in a statement.

    Malaysia said it welcomed the signing of a supplemental agreement between Malaysia Rail Link and the CCCC, the main contractor, which would pave the way for construction on the 688km railway to resume.

    "This reduction will surely benefit Malaysia, and lighten the burden on the country's financial position," it added. Further details are scheduled to be announced on Monday.

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    The electrified railway is designed to connect Malaysia's capital with the towns on the peninsula's east and northeast and, backed by loans from China, was touted as an economic "game changer" by former Prime Minister Najib Razak.

    Critics said it benefited China more than Malaysia. China is building a deep-sea port on Malaysia's east coast and the railway is a key link in its Belt and Road Initiative.

    Najib was overthrown in a general election nearly a year ago amid public anger at allegations of wrong-doing at state fund, 1MDB.

    The ECRL project was stopped by the new administration shortly afterwards because it was too expensive. Prime Minister Mahathir Mohamad said he was worried that the cost of construction would leave the country indebted for a generation.

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    SOURCE: Al Jazeera News