Trans-Sabah Gas Pipeline project has been suspended

KUALA LUMPUR: The Ministry of Finance (MoF) has issued a services and operation suspension notice for three multibillion-ringgit projects -- the Multi-Product Pipeline (MPP), the Trans-Sabah Gas Pipeline (TSGP) and East Coast Rail Link (ECRL) projects.

Finance Minister Lim Guan Eng said the notice was issued through Minister of Finance Inc (MoF Inc) on July 3 to China Petroleum Pipeline Bureau (CPPB), which handled the MPP and TSGP projects; and China Communications Construction Company (CCCC), the main contractor of ECRL.

“The suspension notice takes effect immediately until further notice is issued by the MoF. 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 yesterday.

Lim said Prime Minister Tun Dr Mahathir Mohamad gave the instruction after seeking advice from the Attorney-General.

Suria Strategic Energy Resources Sdn Bhd (SSER) was given the mandate to undertake the MPP and TSGP projects. On Nov 1, 2016, both projects were awarded to CPPB.

He said SSER had paid RM8.3 billion or 88 per cent of the project’s construction value of RM9.4 billion, although progressive work completion, which has not been audited, was only at 13 per cent.

The Finance Minister said the amount of RM9.4 billion did not take into account costs related to land acquisition, two expert consultancy agreements, and a maintenance agreement, which totalled an additional RM1.7 billion.

Meanwhile, the first phase of the ECRL project, linking Gombak and Wakaf Bharu, Kelantan, was approved by the Cabinet in 2016, while the second phase connecting Gombak and Port Klang was approved in 2017.

The rail line project, which stretches from Port Klang to Pengkalan Kubor, Kelantan, is undertaken by Malaysia Rail Link Sdn Bhd (MRL), with CCCC as the main contractor.

“The actual total cost for the ECRL project is expected to reach RM81 billion, which includes land acquisition cost and loan interest during the project construction,” Lim added.

Both SSER and MRL are wholly owned by MoF Inc. - Bernama