Malaysia’s ECRL: A better have a look at the US$11.2b railway’s guarantees of boosting jobs for locals and getting cash | USAEMALL.com

When then-prime minister Najib Razak announced the East Coast Rail Link (ECRL) project in 2016, he estimated it would cost RM55 billion. The next year, it was revealed that constructing both phases of the ECRL would cost a total of RM65.5 billion.

The project was subsequently embroiled in allegations its costs were inflated in return for Chinese state-owned companies undertaking to pay the massive debts of troubled sovereign wealth fund 1Malaysia Development Berhad (1MDB).

When the Pakatan Harapan (PH) coalition assumed power in 2018 under the next premier Mahathir Mohamad, his new administration planned to cancel the ECRL to save the government money.

But in 2019, the PH government, eager to avoid paying a hefty termination fee of RM21.78 billion, eventually renegotiated the ECRL agreement and rail alignment, bringing the cost down to RM44 billion.

Mahathir said that the total amount of the loan will likewise be reduced, with lower interest rates and fees to be paid on the loan, although exact figures were not given.

The ECRL’s realignment was also politicised as the PH government proposed a southern route through the state of Negeri Sembilan, home to Transport Minister Anthony Loke’s constituency of Seremban.

In 2020, the new Perikatan Nasional government – which included Najib’s Barisan Nasional (BN) – reverted the route largely to its original plan and revised the cost estimate to RM50 billion. 

The political bickering did not stop, with the new alignment said to run through at least five parliamentary constituencies that were all heavily contested and lost by BN component parties during the 2008 and 2013 general elections.

After current Prime Minister Anwar Ibrahim took power in 2022, he said in December that year his administration would proceed with the ECRL at a “reduced” cost of almost RM75 billion, revealing that the original cost approved in 2016 was close to RM86 billion.

The RM75 billion price tag comprises construction costs of RM50.27 billion and other costs – including interest fees during construction and land acquisition costs – amounting to RM24.69 billion.

Anwar said his government will not make many changes to the project to avoid delaying its implementation and complicating existing works and negotiations.