Finance Minister Lim Guan Eng said even though Malaysia and China had yet to reach a consensus, a recent visit by Council of Eminent Persons (CEP) chairman Daim Zainuddin to China as the prime minister’s special representative had helped the situation.
“After getting information from both sides, including from Daim’s visit to China, I find in the current situation we are a bit closer,” he said without giving further details.
Lim (PH-Bagan) was replying to a question from Thomas Su (PH-Ipoh Timur), who asked for an update on the renegotiation of the ECRL deal between Putrajaya and Beijing.
Lim added that the federal government’s intent was to reduce the burden of debt as the viability and feasibility of the project was still in question.
“We must remember that the operational costs, if the project can be done, will be very high.
“Don’t even talk about capital expenditure. We cannot even take back operational expenditure of between RM600 million and RM1 billion each year. This is a major issue.
“Clearly, the project must be reviewed so that we are not burdened by such a huge debt. It is a mega project, but it will also result in a mega debt.”
Earlier, in response to the initial question by Ismail Abd Muttalib (BN-Maran) on the status of the ECRL, Lim said work on the project had already been suspended pending renegotiations.
Lim said the government had issued a work suspension notice after receiving advice from the attorney-general.
“If we do not issue a notice of suspension, and China Communications Construction Company (CCCC) continues to do work, we will be responsible for the progress of the work.
“Until now, Malaysia, through Malaysia Rail Link Sdn Bhd (MRL), has paid CCCC RM19.68 billion, comprising an advance of RM10 billion and a progress payment of RM9.67 billion.
“This is a big amount. If we do not issue the notice, then our payments will be higher. It is better that before a final decision is made, a suspension notice is issued,” he said, adding that the notice was issued on July 3.
The 688.3km rail link, which would pass through a part of Selangor, Pahang, Terengganu and Kelantan, was previously estimated to cost between RM55 billion and RM75 billion.
The cost of the ECRL project stands at a whopping RM81 billion – RM69.83 billion for development and RM11.09 billion for financing.