Special Announcement On The Perlindungan Ekonomi & Rakyat Malaysia (PERMAI) Assistance Package
YAB Prime Minister's Special Emergency Announcement
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Improved ECRL Map Comparison
The construction of the East Coast Rail Link (ECRL) is highly regarded as another historic infrastructure project for the people of Malaysia. The ECRL is a high-impact project that will seamlessly link the Klang Valley with the states of Pahang, Terengganu and Kelantan.
China’s state-owned China Communications Construction Company (CCCC) has been appointed for the construction of the project. CCCC is one of the leading transportation infrastructure groups and named as the third top international contractor in the world with Malaysian-owned Malaysia Rail Link (MRL) tasked as the project owner. This is a fine example of economic cooperation between the two countries and will drive the prosperity of Malaysia.
Thus, the ECRL project is a game-changer for the country as it will significantly cut travel time. Over the years, the number of people travelling between the east coast and the west continues to grow. As a result, congestion becomes a problem and remains so until today where on festive occasions in particular, the drive on the roads can take three times longer than usual. The project would also set the tone for an economic spin-off effect and positive social impact for the east coast states. In fact, it is another milestone project that promotes development and regional connectivity.
THE IMPROVED ECRL DEAL
As announced on the 12th of April 2019, Malaysia Rail Link Sdn Bhd (MRLSB) and China Communications Construction Company Ltd (CCCC) signed a Supplementary Agreement (SA) which paved the way for the resumption of the ECRL project. In addition, both parties agreed to form a joint-venture company to manage, operate and maintain the ECRL rail network.
Supplementary Agreement (SA) to the EPCC Contract
The SA covers Phase 1 and Phase 2 of the Engineering, Procurement, Construction & Commissioning (EPCC) of the ECRL at a reduced cost of RM 44 billion. This is a significant reduction of RM21.5 billion or 32.8 percent, 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.
Key Technical Aspects
1. Standard gauge and double tracking of the ECRL is maintained.
2. 640km inclusive of spur lines
3. The ECRL will 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 5 States and WP Putrajaya from the previous 4 states, allowing more States to partake in the economic benefits of the improved deal.
4. 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.
5. The new alignment will leverage on the existing KLIA Express Rail Link (ERL) as well as the future MRT2 SSP Line with an interchange in Putrajaya Sentral. This will improve passenger connectivity to other parts of the Peninsula’s West Coast as well as provide a direct link to KLIA. This is a significant improvement to the single interchange via LRT in ITT Gombak as per the previous arrangement.
6. Passengers on existing KTM Komuter and ETS Services from the Southern part of the Peninsula will interchange with the ECRL at the planned ECRL Bangi/Kajang station.
7. Importantly, the new alignment also prioritises cultural, heritage and environmental factors by avoiding the Klang Gates Quartz Ridge in Gombak Selangor, the longest pure quartz dyke in the world.
8. The ECRL’s New Completion Date: 31 December 2026, extended from original 30 June 2024.
Operation & Maintenance
CCCC has agreed to participate in the operation and maintenance of the ECRL through a joint venture company to be set up (MRL 50%: CCCC 50%). CCCC will provide technical support and share the operational risk after the project’s completion. This arrangement will ease the financial burden on Malaysia, which previously was to bear the entire cost of the O&M. In addition, Malaysia can also leverage on CCCC’s expertise in operation & maintenance (O&M), hence improving the long-term viability of the project. We are confident that CCCC’s involvement will attract and spur investment along the rail link corridor, especially from China.
In looking towards improving our local infrastructure sector, the percentage of local participation has now been increased to 40 percent of civil works, from the previous 30 percent in the original deal.
Partial Refund of Advance Payment Paid to CCCC
CCCC has agreed to refund part of the RM3.1 billion Advance Payment paid for Phase 2, Double Tracking and the Northern Extension under the original contract.
RM500 million will be refunded within a week from 12 April 2019 and a further RM500 million within a month from 12 April 2019, for a total of RM1 billion.
The balance will be settled within 3 months after deductions for verified claims due to abortive works, suspension and cancellation of the Northern Extension.
Substantially Reduced Financial Commitments due to Overall Loan Facility
Under the original ECRL agreement, the total project cost was RM66.7 billion. The loan amount from China-EXIM Bank, at 85 per cent of the project cost, would have amounted to RM56.7 billion. Under the previous Government, the current amount signed for with China-EXIM Bank is RM39.1 billion for Phase 1 alone. The balance of the RM17.6 billion for Phase 2 and the Northern Extension, luckily, were yet to be signed.
With the improved ECRL at RM44 billion, the loan amount from ChinaEXIM bank will be reduced substantially. The reduced amount is still being negotiated with China-EXIM Bank and we envisage that this will result in lessening the financial burden of the Government in terms of the principal repayment amount, total interest costs and other fees.
Source: Press Statement Prime Minister Office Malaysia