PETALING JAYA: An Umno leader has questioned the decision to set up a joint venture company in the operations and maintenance of the East Coast Rail Link (ECRL) project, following the government’s go-ahead for the project which had come under criticism for its huge cost.
Umno Youth vice-chief Shahril Hamdan said the now 640km rail line was considered a strategic asset and as such would be risky to national interests if a foreign firm undertakes a role beyond financing and construction.
“In the past, China was more like the contractor and financier, even that we were accused of selling off the country. Now they are partners in its operations.
“Will the 50-50 cost sharing place the country’s strategic asset in any future risks?” he asked in a Facebook posting.
On Friday, Putrajaya announced the outcome of its renegotiation of the project with China Communications Construction Company (CCCC), culminating in a supplementary agreement to resume the project with some changes in both structure and cost.
The government said it managed to reduce the cost for Phases 1 and 2 of ECRL by RM21 billion to RM44 billion, from the original RM65.5 billion.
But critics questioned the claim and pointed out that it was inaccurate to say there is saving for the project because it has been downsized.
MCA president Wee Ka Siong said the length of the track and number of stations will be reduced, while a major part of ECRL which would cut through a section of the Titiwangsa mountain range between Bentong and Gombak is now axed.
“When you compare apples with apples and there is a reduction in the cost, that is cost saving,” Wee told FMT today.
“But when you downsize the specifications of the project, there is no longer a fair comparison,” he said, adding that the compensation for land acquired in the same area also contributed to the reduced cost.
The realigned ECRL now starts in Kota Baru and goes through Mentakab, Jelebu, Kuala Kelawang, Bangi/Kajang and Putrajaya before ending in Port Klang, in what its main proponent Najib Razak described as removing the main attraction of the link’s inclusion of Gombak.
Shahril agrees, saying omitting the Bentong-Gombak link could affect ridership.
“So when the route is realigned to go through Negeri Sembilan, what is the daily ridership estimation once the ECRL is completed?” he asked.
On the government’s claim that the loan amount from China-Exim Bank will be smaller, Shahril asked if there would not be any increase in interest rates when the revised deal is formalised.
Dr Mahathir Mohamad earlier said the loan amount from the bank, at 85% of the project cost, would have amounted to RM56.7 billion.
“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,” the prime minister has said.