MRL says it will remain ECRL's asset owner regardless of JV to share operational risks with CCCC

• MRL reiterated that there are "no changes" to its proposed post-construction partnership with CCCC, as per the signing of a memorandum of understanding (MOU) for ECRL’s management, operation and maintenance phase back in April 2019.

KUALA LUMPUR (July 12): Malaysia Rail Link Sdn Bhd (MRL) said it will remain the asset owner of the East Coast Rail Link (ECRL) throughout its operational phase, regardless of its planned joint venture (JV) with the project's main contractor, China Communication Construction Company Ltd (CCCC), to share the operational risks of the project once construction is completed.

Under the JV that will be undertaken via an operating company (OpCo) to be established between the two entities, MRL and CCCC will each bear 50% of the risks if the ECRL operates at a deficit. Should the ECRL operate at a surplus, MRL will get 80% of the earnings while CCCC will receive the balance 20%, it said.

In a statement on Friday, MRL reiterated that there are "no changes" to its proposed post-construction partnership with CCCC, as per the signing of a memorandum of understanding (MOU) for ECRL’s management, operation and maintenance phase back in April 2019.

At the time, it had said the joint operation would not involve ceding any form of ownership of the ECRL to CCCC, and that the arrangement was purely to share management, operation and maintenance costs, plus the exchange of technical know-how and expertise between the companies.

"MRL also wishes to state it has been appointed as the asset owner of the ECRL by the government of Malaysia, in line with the plans that were established back in April 2019. This will pave the way for MRL to sign an operation agreement with the OpCo to enable the OpCo to gain access to ECRL’s assets for operation and maintenance.

"On that note, MRL wishes to state it will have full ownership of ECRL assets on behalf of the government as the ECRL asset owner company throughout the operation phase of the ECRL. Hence, the government of Malaysia will own 100% all ECRL assets via MRL, considering the company is a wholly owned subsidiary of the Minister of Finance [Inc]," MRL said in a statement on Friday.

The plan, it said, is consistent with a recent statement made by Transport Minister Loke Siew Fook that MRL and CCCC will jointly share the costs for ECRL’s operations as well as facilitate the exchange of technical know-how and expertise, MRL said.

MRL is currently the project owner of the ECRL, while CCCC is the engineering, procurement, construction, and commissioning (EPCC) contractor.

The 665km project that bridges the east and west coasts of Peninsular Malaysia involves 59 tunnels and construction works spanned four states: Kelantan, Terengganu, Pahang and Selangor. Once operational, the ECRL will reduce travel time between Kota Bharu and Kuala Lumpur to four hours, compared to a seven-hour car journey.

Construction works on the Kota Bharu-Gombak stretch is expected to be completed by the end of 2026, with operations expected to start in January 2027, said MRL.

The segment from Gombak to Port Klang is anticipated to be completed by the end of 2027.

As of May, the ECRL's overall construction progress had reached 67.09%, according to the Transport Ministry.

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