Mohd Redzuan Yusof (PN-Alor Gajah) said investor confidence would be boosted and leakages reduced if the government did so.

He said the Treasury’s own circular stated that any letter of acceptance issued by the government is a binding contract between it and private entities.

Citing a court dispute over the delayed Klang Valley Double Tracking (Phase 2) project, or KVDT2, he said the government has to be consistent with its policies, including the prime minister’s promise to reduce red tape.

KVDT2 is the subject of a court battle between the contractor and the transport ministry.

The project has been delayed twice since 2017. It was cancelled by the Pakatan Harapan government, reinstated, then cancelled again by the succeeding Perikatan Nasional government, leading to a suit by the contractor, Dhaya Maju-LTAT.

Speaking in the Dewan Rakyat during the committee stage debate on the 2022 federal budget, he said the government may face huge losses if the project is cancelled.

“There are views that if the government cancels this contract, it will cost it a huge amount of money. Let’s say the initial cost of the project is RM4 billion but with the compensation and legal fees, the new cost may be over RM10 billion,” he added.

Redzuan, a Bersatu Supreme Council member, served as a minister in the prime minister’s department in the PN government and as entrepreneur development minister during the PH administration.