PETALING JAYA: Prime Minister Tun Dr Mahathir Mohamad says the government would give the East Coast Rail Link project the green light if China contractors agree to significantly reduce the price.
"If it must go on, the price must be affordable by us.
"But on the other hand, if we build a railway line that is going to cost us a lot of money and give us no return, we just cannot afford to do that," he said.
Speaking to the foreign media during his trip in Manila, where he is meeting Philippine President Rodrigo Duterte, Dr Mahathir said the government does not have the money, and it cannot borrow large sums of money to build something which is not only would have no ROI (Return Of Investment), but “would take the country 40 to 50 years to repay the loans.”
"So, we want to avoid incurring debts; borrowing too much from the country.
"We have to look into the needs - do we need this railway line or not? We have had the west coast service by rail for more than 100 years. But, still it is not profitable.
"And the west coast is where all the businesss (and) all the people are," he said this in an interview, which is recorded by South China Morning Post.
Last year, Dr Mahathir was reported saying that the ECRL project needed to be cancelled because it was unnecessary and too expensive.
However, earlier this year, Dr Mahathir announced that plans to possibly revive the project with discussions, which have been led by Tun Daim Zainuddin, with the aim of reaching a smaller project size and cost.
Dr Mahathir also pointed out that the Chinese contractors do not want to stop the project, as it is good for their business.
When pressed by reporters on a price point at which Malaysia will say 'Yes' to the ECRL, Dr Mahathir merely replied, "Yes, yes there is, but I cannot reveal to you."
He also noted that the government is in the midst of negotiating the deal with them, pointing out that to cancel the project would cost the country a hefty price.
"We know that you can't terminate unilaterally a contract. You would have to pay compensation, and the compensations can be very big," he added.
The RM81bil ECRL project was approved by the Cabinet under former prime minister Datuk Seri Najib Tun Razak in October 2016.
The construction was to be handled by China Communication Constructions Company Ltd (CCCC), while the financing was to be provided by Export-Import Bank of China (Exim Bank of China).
Malaysia would be able to secure part of the loan from Exim Bank of China, on the condition that CCCC builds the railway.
The 688km rail link, if built, will connect Port Klang in Selangor with Pengkalan Kubor in Kelantan, and will be constructed in two phases.
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