Cancelling the East Coast Rail Link (ECRL) would not mean the government would be able to recoup RM10.02 billion from the project, said former prime minister Najib Abdul Razak.

Instead, he said the government will be asked by the Export-Import Bank of Malaysia Bhd (Exim Bank) to return RM19.68 billion it has disbursed to the project’s contractor China Communications Construction Company Ltd (CCCC).

“The project is being financed by a 20-year soft loan from China’s Exim bank and all payments to CCCC thus far came directly from the bank.

“If the project is scrapped now, Exim Bank would cancel our loan and ask us to repay the loan immediately.

“Therefore Malaysia would not be able to recoup the RM10 billion because it would be returned to Exim Bank. Moreover, we would be asked to pay the remaining RM9.6 billion already disbursed by Exim Bank.

“Has the government taken account of this and has prepared funds to make this payment?” he asked in his Facebook post today.

Earlier today, Finance Minister Lim Guan Eng told parliament that Malaysia Rail Link (MRL) Bhd could reclaim RM10.02 billion from CCCC if the government makes a final decision to scrap the now-suspended project.

The figure represents the MRL’s advance payments to CCCC.

“So in the worst case scenario, MRL can recoup RM10.02 billion from the total RM19.68 billion paid (to CCCC) so far,” he said, adding that another RM9.67 billion was paid for the project’s progress up to Feb 15.