Malaysia’s biggest rail project stalls as it goes nearly double over budget

4 Jul 18

Malaysia’s biggest rail project is on hold while the government discusses the cost with contractors as at $20bn it will be nearly double what the previous government had estimated.

The 688km rail link will connect the South China Sea in the east with the west of the country, in a major push to improve infrastructure between China and Malaysia.

Lim Guan Eng, the country’s finance minister, said in a statement: “We expect that the East Coast Rail Link project will only become financially and economically feasible if there is a drastic price reduction of the project by the China Communication Construction Company.

“Discussions on cost will be held with the contracting parties and others involved in the projects.”

The finance ministry said that the basic cost of the project was around 67bn ringgit, but when land acquisition, operation costs, interest and fees are taken into account, costs will be closer to 81bn ringgit ($20bn), if the previous government’s construction plans were followed.  

The project was estimated to cost around 55bn ringgit ($13.60bn) by the former government.

The construction began almost a year ago.

Since the election in May, the new government has vowed to cut national debt and tackle corruption.

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