23 APRIL 2019
State Authorities have Vested Interest to all Minerals in ECRL Project
Malaysia Rail Link Sdn Bhd (MRL) will like to refute allegations that China Communications Construction Company Ltd (CCCC) will be able to state their claim on minerals or objects of interest during the construction of the 640-km East Coast Rail Link (ECRL) project.
We like to point out that the construction of the ECRL project, which now connect the states of Kelantan, Terengganu, Pahang, Negeri Sembilan, Selangor and Putrajaya, must comply with the National Land Code 1965.
Among others, Section 40 of the National Land Code clearly provides for the respective state authorities to have vested interest in any mineral and rock minerals which may be found within their respective territories of their state.
The extract of Section 40 as follows:
40. Property in State land, minerals and rock material There is and shall be vested solely in the State Authority the entire property in- (a) all State land within the territories of the State; (b) all minerals and rock material within or upon any land in the State the rights to which have not been specifically disposed of by the State Authority.
Hence, we would like to dispel recent commentaries and news reports which suggested that CCCC may be able to extract minerals such as gold or silica and take ownership of such minerals in the midst of their construction of the rail network.
Similar to any major construction contracts, the Engineering, Procurement, Construction and Commissioning (EPCC) contract for the ECRL Project also contains a clause on ‘Antiquities’, in which antiquities and other objects of interest or value that may be found on the construction site, would become the absolute property of the Employer, in this case MRL.
MRL also wish to reiterate it would have full ownership of assets in the 50:50 joint-venture company (JV Co) to be established with CCCC for the operation and maintenance (O&M) of the ECRL in a bid to ensure such assets are within the control of the Government of Malaysia.
MRL, which is wholly-owned subsidiary of the Minister of Finance Incorporated (MOF Inc), would like to point out that the appointment of the board of directors together with the post of the Chief Executive Officer in the JV Co would be solely at the discretion of the Government of Malaysia.
As project and asset owner of the ECRL, MRL would like to stress that there is no truth to recent commentaries and news reports which appear to suggest that Malaysia risked ceding assets and sovereignty to China as a result of a JV Co.
The JV Co between MRL and CCCC is purely for technical support and sharing of operational risk, as Malaysia stands to leverage on the O&M expertise for the ECRL through the Chinese Government-backed conglomerate.
MRL would also like to highlight that the Memorandum of Understanding (MoU) with CCCC does not require the Government of Malaysia to undertake any guarantee on the revenue or profit for the JV Co with regards to the O&M.
Hence, the distribution of profit and losses during the operations of the JV Co would be as agreed upon under the MoU.
Should the JV Co incur losses, it would be split 50:50 between MRL and CCCC. However, if the operations are profitable, 80 percent of the profits would be taken up by MRL while the balance 20 percent would be for CCCC.
Released by the Corporate Communications Department of Malaysia Rail Link Sdn Bhd. For further information, please contact: Rosmah Mahmud at (03-6411 5800 ext. 5830 / [email protected]) or Yong Min Wei at (03-6411 5800 ext. 5835 / [email protected])