This article first appeared in The Edge Financial Daily on July 11, 2019

KUALA LUMPUR: The reduction in the cost of the East Coast Rail Link (ECRL) project is not due to its scaled-down scope, but rather a review of its engineering aspects.

In a written reply to Datuk Seri Dr Wee Ka Siong (BN-Ayer Hitam), Transport Minister Anthony Loke said the government had reduced the project cost by RM21.5 billion to RM44 billion, from its original cost of RM65.5 billion.

“The RM21.5 billion reduction in cost was achieved through a review of all engineering aspects [pertaining to the project] and value engineering that encompasses all aspects of the implementation of the project,” Loke said.

He added that if the government had not gone back to the negotiation table with the Chinese government and contractor China Communications Construction Company Ltd (CCCC), the government would have to pay a compensation of up to RM21.78 billion.

Wee had asked if the cost reduction was due to the scope of the project being downsized.

Loke also said the initially-proposed Kota Baru-Wakaf Baru-Pengkalan Kubor section of the ECRL project would not be implemented as it would not add significant value to the country’s rail transport network for the time being.

Since the Bentong, Gombak Utara, ITT Gombak, Telaga Papan, Jelawat, Pengkalan Kubor and Wakaf Baru stations were axed from the proposed rail link, new stations such as Bangi/Kajang, Putrajaya Sentral, Port Klang and other stations in Selangor and Negeri Sembilan were identified. Thus, there was no downsizing of the project scope, said Loke.

In a supplementary question, Siti Zailah Mohd Yussof (PAS-Rantau Panjang) asked why bumiputera contractor participation in the megaproject was only 40% after the renegotiation.

Loke said that the government had increased the local contractor participation to 40%, from 30% previously. “Why was this question not posted to the Barisan Nasional government before? Under the previous government, local content was only 30%, and we increased it to 40%,” Loke said.

He also dismissed allegations that the ECRL project would not benefit opposition states, saying it would “spark development” in the federal territories and four states, including Kelantan and Terengganu.