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MRL, CCCC set up JV to manage, operate, maintain ECRL

  • Mahathir says Malaysia Rail Link and China Communications Construction Company Ltd will form a 50:50 joint-venture company to manage, operate and maintain the ECRL network. Photo courtesy: Bernama

PUTRAJAYA, April 15 (Bernama) -- Malaysia Rail Link Sdn Bhd (MRL) and China Communications Construction Company Ltd (CCCC) have agreed to form a 50:50 joint-venture (JV) company to manage, operate and maintain the East Coast Rail Link (ECRL) rail network, says Prime Minister Tun Dr Mahathir Mohamad.

The Prime Minister said this was after the signing of Supplementary Agreement (SA) by MRL and CCCC on April 12.

"CCCC has agreed to participate in the operation and maintenance of the ECRL through a 50:50 JV, (whereby) CCCC will provide technical support and share the operational risk after the project"s completion," he told a press conference here, today.

Dr Mahathir said the arrangement would ease the financial burden on Malaysia, which previously was to bear the entire cost of the operation and maintenance (O&M).

"In addition, Malaysia can also leverage on CCCC"s expertise in O&M, hence improving the long-term viability of the project," he said.

He said the government was confident that with CCCC"s involvement, it would attract and spur investment along the rail link corridor, especially from China.

Dr Mahathir said in the original deal by the previous government there was nothing about Malaysia"s share of the construction, but under the new deal, its participation was included.

Under the SA, the percentage of local participation in ECRL would also be increased to 40 per cent of the civil works, from the previous 30 per cent in the original deal, he said.

Asked if Malaysia would pay any compensation for suspending the project since July last year, the Prime Minister replied that the issue was not mentioned during the negotiation.

"We will start (the project) off as if there has been no interval between the stoppage of the previous construction, and the beginning of the new construction," he added.

Tun M said the construction of ECRL would resume as soon as possible after the signing of SA and completed on Dec 31, 2026, and not June 30, 2024, as in the original plan.

On payment of the project, Malaysia according to him, "... will pay according to the progress of the construction."

According to a statement released by the Prime Minister"s Office (PMO) today, the ECRL"s new alignment would have a total length of 640km.

"The new alignment will avoid the construction of the 17.8km-long Genting Tunnel from Bentong to Gombak. It will provide a direct link from Kuantan Port to Port Klang to serve as a land bridge between the two ports," it said.

According to Dr Mahathir, the Pakatan Harapan government was faced with the choice of either renegotiate the original deal or pay termination costs of about RM21.78 billion.

"As such, we chose to go back to the negotiation table and call for a more equitable deal, whereby the needs of the Malaysian people would be prioritized," he added.

 

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