This article first appeared in The Edge Financial Daily on April 24, 2019

KUALA LUMPUR: The project and asset owner of the East Coast Rail Link (ECRL) project, Malaysia Rail Link Sdn Bhd (MRL), has dismissed allegations that China Communications Construction Company Ltd (CCCC) will be able to state its claim on assets, minerals or objects of interest when constructing the 640km railway.

“We wish to reiterate [that we] will have full ownership of assets in the 50:50 joint-venture company (JV) to be established with CCCC for the operation and maintenance (O&M) of the ECRL,” MRL said in a statement yesterday.

“As the project and asset owner of the ECRL, MRL would like to stress there is no truth to recent commentaries and news reports appearing to suggest Malaysia risked ceding assets and sovereignty to China as a result of the JV,” it added.

MRL, a wholly-owned subsidiary of the Minister of Finance Inc, said the JV is purely for technical support and sharing of operational risks.

The ECRL project owner also cited the Malaysian government is not required to provide any revenue or profit guarantee for the JV. “If the JV incurs losses, it would be split 50:50 between MRL and CCCC,” MRL said.

However, if the operations are profitable, 80% of the profits would go to MRL and 20% to CCCC, it added.

CCCC will also not have any claim on minerals such as gold or silica during the ECRL’s construction, said MRL. This is because under the National Land Code 1965, respective state authorities have vested interest in any minerals and rock minerals which may be found within their respective territories, it added.

Additionally, the engineering, procurement, construction and commissioning (EPCC) contract for the ECRL project has a clause on “Antiquities”, where antiquities and other objects of interest or value that may be found at the construction site would become the absolute property of the employer — in this case, MRL — it said.