The contractor for the East Coast Rail Link (ECRL) project was nominated by China, according to Prime Minister Najib Abdul Razak.

In a parliamentary reply, he said Malaysia was granted attractive financing terms in exchange for China nominating the contractor.

"In order for Malaysia to receive the best financing terms, during the government-to-government negotiations, China nominated its country's largest construction company, namely China Communications Constructions Company (CCCC), to execute the ECRL project at a cost of RM55 billion," he added.

Najib was responding to a question by PAS' Temerloh MP Nasruddin Hassan on whether the government had conducted its due diligence in awarding the tender for ECRL.

The prime minister said CCCC had a good track record in major construction projects including Malaysia and the government was confident the company could deliver on ECRL.

Won't sideline local firms

In another written reply, the Finance Ministry said The Export Import Bank of China (China Exim Bank) offered a soft loan to Malaysia for the project at low interest rates.

It added that the loan, for a period of 20 years, also allows for a grace period of seven years where the government does not need to repay the principal.

"To qualify for this financing offered by China Exim Bank, the project had to be executed by CCCC," read the reply.

The written reply was in response to DAP's Petaling Jaya Utara MP Tony Pua, who had asked the government to justify the award of the contract to CCCC.

The Finance Ministry stressed that local companies would not be sidelined in the project, adding that CCCC would be required to appoint local companies to assist as well as for technology and knowledge transfer.

"The government has, in principle, agreed at least 30 percent of the infrastructure work will involve local companies and contractors," stated the ministry.

The ECRL would link the East Coast of Malaysia with Klang Valley.

It is expected to improve trade connectivity as well as spurring development in the East Coast.