Report: Malaysian ECRL workers in limbo, firms’ shares nosedive after project axed

Ranjit Singh
A man looks at a map of the East Coast Rail Link (ECRL) during a ground-breaking ceremony in Tunjong, Kota Baru, April 11, 2018. — Bernama pic

KUALA LUMPUR, Aug 22 ― The Malaysian workers in the East Coast Link Railway (ECRL) project in Pahang are in a quandary after the prime minister confirmed its cancellation in Beijing yesterday.

Half the Malaysian workforce were already retrenched last month, as were the workers from China who number between 18 and 20 per cent, The Star reported today, citing an anonymous senior source at Malaysian Rail Link Sdn Bhd (MRL), the ECRL owner.

“Right now, we don’t know what the actual status of the project is.

“We are still waiting for an announcement from the top management,” an unnamed senior construction worker in Bentong, Pahang told the daily.

According to the MRL source, the project’s Chinese partner China Communications and Constructions Company (CCCC) trimmed the workforce in July when the government suspended the ECRL project.

“Half of them are already retrenched and the Chinese workers were told to leave,” the source was quoted saying.

The MRL source was also reported saying compensation for the project will be “quite high” as the company has paid more than RM10 billion to the main contractor, CCCC; adding that RM9 billion has been claimed for work done.

The ECRL that was to link the east and west coasts of peninsular Malaysia across the Titiwangsa mountain range was launched on August  9, 2017 and scheduled for completion in 2024.

Socio Economic Research Centre executive director Lee Heng Guie said the impact of the cancellation of the projects to the Malaysian economy would be manageable, although there would be some negative effect on consumption and investment.

“There could be some impact on the job market with the expected layoffs. But I don’t think the cancellation will pull down investment and consumption significantly.

“Whatever contraction of the economy that we will likely see because of the ECRL cancellation should be cushioned by ongoing projects,” he told The Star.

Criticism on previous construction projects undertaken by companies from China was that it had little multiplier effects on domestic economy because almost everything was brought in from there.

The shares of local listed companies related to the ECRL project were battered in yesterday’s trading on Bursa Malaysia.

Shares of Gabungan AQRS, the sub contract for the construction of the 688km-long rail project plunged by 18 sen to RM1.91 with 4.65 million shares done.

HSS Engineers, a consultancy services firm awarded a RM82.5 million engineering consultancy job for ECRL, tumbled 17 sen to 96 sen with 21 million shares done.

The short selling of HSS was suspended at 2.35pm yesterday for the rest of the day after its share price fell more than 15 sen, which was 15 per cent from the reference price.

Bursa Malaysia is closed today due to the Hari Raya Haji public holiday.

Prime Minister Tun Dr Mahathir Mohamad announced the cancellation of the ECRL project and other China-backed infrastructure projects in Beijing yesterday, saying Malaysia could not afford them.

He added that compensation will be paid following negotiations.

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