A Malaysian company that is a signatory in the East Coast Rail Link (ECRL) project contract with China has come under scrutiny, after it was revealed that the company's paid-up capital was only RM2.

The company - the Malaysia Rail Link Sdn Bhd - listed two senior Finance Ministry officials as shareholders. Official records state that the company was registered on Sept 26, 2016.

According to reports by New Straits Times and Bernama, Malaysia Rail Link was the signatory of the Engineering, Procurement, Construction and Commissioning agreement with Chinese Communication Construction Company (CCCC) and China Communications Construction Company (M) Sdn Bhd (CCCCM).

The CCCC, a company owned by the government of China, will build the ECRL at a reported cost of RM55 billion.

Four Pakatan Harapan MPs, who went through the records of Malaysia Rail Link, said the company's involvement raised questions on whether the deal complied with procedures.

"Normally, for major infrastructure projects, a special purpose vehicle would be established by the government.

"The government will then ask Parliament for approval in order to raise capital.

"For example, when Prime Minister Najib Abdul Razak had to table a motion in the Dewan Rakyat to seek RM10 million for the high speed rail project linking Kuala Lumpur to Singapore," the MPs said in a joint statement today.

This was not the case for the ECRL, they said.

"We also question if Najib had sought cabinet approval before allowing a company to represent Malaysia in signing a multi-billion ringgit deal," the MPs added.

The statement was signed by Pandan MP Rafizi Ramli, Kuala Krai MP Dr Hatta Ramli, Kelana Jaya MP Wong Chen and Serdang MP Ong Kian Ming.

Malaysiakini is attempting to contact the two government officials named by the MPs.

Conflicting claims on ECRL cost

Meanwhile, there appears to be conflicting claims over the cost of the ECRL - which in itself has been a controversy for some time.

Most officials from Putrajaya have long touted that the project costs RM55 billion, although Transport Minister Liow Tiong Lai clarified that the sum for the Financing Framework Agreement and the construction cost of the ECRL will actually be less.

However, in a statement on the CCCC website dated Nov 2, it was claimed that the ERCL will cost about RM46 billion.

In another statement on the same day, the CCCC announced that a consortium that it is involved in had been awarded a RM8.9 billion project to undertake the Gemas-Johor Baru electric double track railway project.

The other members of the consortium are China Railway Construction Corporation Ltd (CRCC) and the China Railway Group Ltd (CREC).

CCCC said it held a 30 percent stake in the project.

"CRCC-CREC-CCCC consortium received the award letter of railway project in southern Malaysia from Liow Tiong Lai, Malaysia's minister of transport, with a contract value of RM8,900 million, marking that the consortium has officially won the bid," states the statement.

Previously, it was reported that several local firms were vying for the same project.

If the value of both the ECRL and the Gemas-Johor Baru rail project were added together, the total sum amounts to RM54.8 billion.

Cheaper elsewhere

Previously, Petaling Jaya Utara MP Tony Pua had had calculated that if the price tag of the ECRL was indeed RM55 billion, it would translate to a cost of RM91.7 million per kilometre.

This would mean that the ERCL would be more expensive than the Padma rail line in Bangladesh (RM68.1 million per kilometre) and Mombasa-Nairobi rail link in Kenya (RM61.4 million per kilometre).

The CRCC is handling both these jobs. The Padma rail line is in the planning stage while the Mombasa-Nairobi link is nearing completion.

Pua said the Awash-Weldia railway line in Ethiopia, which is currently being built, costs only RM18.1 million per kilometre. It is being constructed by Turkish contractor Yapi Merkezi.

In July, whistleblower website Sarawak Report claimed that the cost of the ECRL was inflated to allegedly help pay for 1MDB's debts and provide the CCCC with generous tax breaks.

Citing documents from the CCCC, Sarawak Report said the deal would see CCCC pay off the 1MDB debts in advance and progressively to Abu Dhabi sovereign wealth fund International Petroleum Investment Company (IPIC), among other creditors.

The website correctly predicted that the deal would be funded by a loan from China.

Although officials from Putrajaya have brushed off the allegations, details of the loan and the feasibility study of the project have not been made public.