This article first appeared in The Edge Financial Daily on June 7, 2018

PUTRAJAYA: The government may defer or terminate the controversial East Coast Rail Link (ECRL) which is still being studied, said Prime Minister Tun Dr Mahathir Mohamad.

“We want to negotiate the terms to ensure that we don’t have to spend so much money on the ECRL, because we cannot afford it. We also found that the contract includes payment according to a specific time.

“So far, we can determine that the work done is so much less than the payments that have already been made. The project will be studied, we can either defer or terminate,” he told a press conference after his weekly Cabinet meeting yesterday.

Previously, Dr Mahathir had said the government would renegotiate the terms of the contract — which he described as strange — with various Chinese companies.

The ECRL contractor is state-owned China Communications Construction Co Ltd and the loan is from the Export-Import Bank of China.

The Edge Malaysia weekly, quoting sources, had reported that the ECRL can be built for under RM40 billion but the contract was inflated to RM60 billion, and is now expected to cost as much as RM70 billion once it is signed in 2018.

The 688km rail link, if built, will connect Port Klang in Selangor to Pengkalan Kubor in Kelantan. It will be constructed in two phases.