Guan Eng: ECRL, pipeline projects suspension not targetting China

  • Jul 5, 2018
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Finance Minister Lim Guan Eng today said the suspension of the East Coast Rail Link (ECRL), Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects was not intended to target China.

Lim added that the suspension of all three projects which were being built by China state-owned companies was made on Prime Minister Dr Mahathir Mohamad's instruction.

"The prime minister, after seeking advice from the attorney-general, has instructed the Finance Ministry to issue a 'suspension notice' through Minister of Finance Inc for all contracts related to MPP, TSGP and ECRL on July 3.

"The services and operation 'suspension notice' takes effect immediately until further notice is issued by the Finance Ministry.

"The decisions are solely directed towards the related contractors relating to the provisions mentioned in the agreements, and not at any particular country," he said in a statement today.

The ECRL project is a rail line from Port Klang to Pengkalan Kubor, Kelantan which was awarded to China Communications Construction Company (CCCC) by the previous BN government last year.

Lim said the actual cost for the ECRL project was expected to reach RM81 billion compared to the RM55 billion announced by the previous government, factoring in land acquisition cost and loan interest during the project construction.

Meanwhile, the MPP and TSGP projects were awarded to China Petroleum Pipeline Bureau (CPPB) on Nov 1, 2016 at a cost of RM9.4 billion.

However, Lim said RM8.3 billion or 88 percent of the project construction had been paid even though the work completed was only at 13 percent.

He added that the RM9.4 billion cost did not take into account land acquisition as well as two expert consultancy agreements and a maintenance agreement amounting to RM1.7 billion.