China Company to Refund Part of RM3.1B ECRL Advance

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ERCL deal includes palm oil trade but not Jho Low.

China Communications Construction Company Ltd (CCCC) has agreed to refund part of the RM3.1 billion advance payment for the East Coast Rail Link (ECRL) Phase 2, Double Tracking and the Northern Extension under the original contract.

“RM500 million will be refunded within a week from April 12, 2019 and a further RM500 million within a month from this date for a total of RM1 billion,” Prime Minister Tun Dr Mahathir Mohamad told a press conference following the signing of a Supplementary Agreement (SA) between CCCC and Malaysia Rail Link Sdn Bhd on April 12.


“The balance will be settled within three months after deductions for verified claims due to abortive works, suspension and cancellation of the Northern Extension,” he added

The SA covers Phase One and Phase Two of the Engineering, Procurement, Construction & Commissioning (EPCC) of the ECRL at a reduced cost of RM44 billion.

This is a significant reduction of RM21.5 billion or 32.8 per cent, from its original cost of RM65.5 billion.

The improved ECRL will cost RM68.7 million per km compared to RM95.5 million per km under the original agreement, said the Prime Minister.

The new alignment would run through 20 stations, among others, from Kota Bahru to Kuala Terengganu, Kuantan, Mentakab and proceed to Jelebu, Bangi/Kajang, Putrajaya Sentral and onto Port Klang.

Therefore, it will now pass through five states and the Federal Territory of Putrajaya from four previously, allowing more states to partake in the economic benefits of the improved deal.

The new southern alignment will also provide a direct land link from Kuantan Port to Port Klang, serving as a land bridge between the two ports.

The new alignment will also leverage on the existing KLIA Express Rail Link (ERL) as well as the future MRT2 SSP Line with an interchange at Putrajaya Sentral, Dr Mahathir said.

He said the success of the renegotiation, led by his special envoy Daim Zainuddin, showed that the Pakatan Harapan government could secure a more equitable deal and lower the cost as opposed to the lopsided deal negotiated by the previous administration.

He also revealed that Putrajaya had taken advantage of the deal to press Beijing to import more palm oil from Malaysia.

He clarified that the ECRL project deal was not inked with the condition that China returns fugitive Jho Low.

“This has nothing to do with Mr Jho Low. But of course, we seek the Chinese government (with regard to Jho Low),” he added.