‘RM10b payment can be recovered’
KUALA LUMPUR: The government is expected to be able to redeem the RM10.02 billion advance payment made to China Communications Construction Ltd (CCCC) if the East Coast Rail Link (ECRL) project is cancelled, the Dewan Rakyat was told.
Finance Minister Lim Guan Eng said as at Feb 15, Malaysia Rail Link Sdn Bhd (MRL), as the project owner, had paid more than RM19.6 billion to CCCC, the main contractor of the project.
He said the amount included an advance payment of RM10.02 billion and progress payment of RM9.67 billion.
“It should be noted that an advance bond can be redeemed by MRL if the project is terminated. In other words, if the worst-case scenario should arise, the government can recover RM10.02 billion,” he said in reply to Tan Sri Noh Omar’s (Barisan NasionalTanjung Karang) question.
Lim said the decision on whether the project would proceed or be cancelled had yet to be finalised as negotiations were ongoing.
He said the Selangor government had protested against the project as the proposed rail link from Gombak to Port Klang would affect its chances of obtaining the United Nations Educational, Scientific and Cultural Organisation heritage site status for the 16km-long Klang Gate Quartz Ridge, which is the longest quartz ridge in the world.
Lim said work pertaining to the project had been suspended since July 3 pending a new decision.
He said four sessions of consultations had been held between Malaysia and China, particularly on the direction of ECRL, while MRL and CCCC had held technical sessions to reduce the cost of the project, which was estimated at RM80.92 billion.
“The government has yet to make any decision on that. I hope the honourable MP can understand that the cost is high.
“Apart from the RM80.92 billion, the government has to take into account interest payable for the project, and also cost management, which could reach RM1 billion every year,” he added.
Meanwhile, Lim questioned the Kelantan government’s ability to take over the ECRL project from the Federal Government.
He said the state government relied on financial aid from the Federal Government and could not pay the salaries of its civil servants without funds from Putrajaya.
He said the financial aid was not something new as it had started since the days of former prime minister Datuk Seri Najib Razak.
“The Kelantan government has been unable to pay its staff. Recently, I had approved an allocation to help the state government. Although opposition states criticise the Pakatan Harapan (PH) government, we still provide aid to them. That’s a fact. And this (giving of aid) has taken place since the administration of Najib,” he said at the Parliament lobby yesterday.
Earlier, an exchange of words took place during question time when Lim was replying to a question by Datuk Takiyuddin Hassan (Pas-Kota Baru) on the possibility of the Kelantan, Terengganu and Pahang governments taking their own initiative to continue the ECRL project if it was cancelled by the Federal Government.
Lim said he welcomed the initiative of the state governments’, but questioned their financial capabilities.
“It got me thinking how the Kelantan government can do so if it cannot even pay the salaries of its civil servants,” he said.
Najib, during a working visit to Kelantan as prime minister in January, reportedly said the Kelantan government was not capable of paying the salaries of its civil servants.