RM100b ECRL should be scrapped

Opinion  |  P Gunasegaram
Published:  |  Modified:

A QUESTION OF BUSINESS | Not only is the East Coast Rail Link (ECRL) highly overpriced and extremely lopsided in favour of China - that alone is reason enough to scrap it - its ties with 1MDB and attempts to cover up debts by channelling overpriced contract sums should be investigated, unravelled and those responsible brought to book.

As much as the scrapping of the high-speed rail project to Singapore is a pleasant surprise, it came as a shock that the estimated cost of this project was RM110 billion, according to Prime Minister Dr Mahathir Mohamad.

This compares to initial cost estimates of RM40-60 billion and shows how much infrastructure costs can balloon compared to initial estimates when the projects are first mooted. Hopefully Singapore will be amenable to reducing the RM500 million compensation, or forego it altogether, for scrapping this unfeasible project as we had explained here.

Now let’s focus next on the ECRL which the government says costs RM55 billion but which we estimated may cost RM100 billion with cost overruns. But if the cost escalation at HSR is anything to go by, then the cost here will be more than double the RM55 billion and could be as high as RM120 billion!

This is a project which is even less feasible then the HSR. Even assuming a project cost of RM55 billion, it is still terribly unfeasible as pointed out in this analysis.

The table below gives the main information regarding ECRL but even this is only for the section from Kota Bharu to Gombak. The Gombak to Port Klang section is not included and the Council of Eminent Persons, or CEP, estimated this to cost a further RM11 billion to take the cost up to RM66 billion.

Note too that the project excludes land costs and costs of rolling stock which will take total project costs much higher. Also, the rail is only for a single track at the moment with provisions to incorporate a double track later which will increase project costs further.

In fact, the cost of construction of the link as the current price is said to be by far the most expensive such contract in the world...

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