China offered to reduce ECRL cost by nearly 50% - report

A report cites sources as saying that China offered to reduce the East Coast Rail Link (ECRL) project construction costs, as Prime Minister Mahathir Mohamad had, in the past stated that the Malaysian government does not have the funds to pay for the project.

The report by Reuters quotes the source as saying: “If it was just about the cost, China has offered a big reduction on the cost, as much as around half.” 

According to the sources, Contractor China Communications Construction Co Ltd (CCCC) had offered to cut construction costs of RM67 billion for the 688-km (428-mile) project by as much as half.

The sources who declined to be named also said that despite the offered discount, Mahathir’s government decided to cancel the contract this month.

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“We either have to cancel the (East Coast Rail Link) project or to defer it or to reduce the cost, that is what we want to do... For me, I had only said it in principle, we have no money and we have to cancel or defer, or reduce cost,” Mahathir said in previous reports.  

Dr Mahathir has also said former prime minister Najib Razak had entered into lopsided contracts with China. 

“Unlike all other contracts, instead of paying based on work done, they paid according to a timetable.

“And we have found that the work done was only 13% but we already paid 39%. What do we get from the extra money that had been spent? This has got to be negotiated.”