Today, LAFARGE Malaysia Berhad (3794) announced that they can resume supplying cement for all eight packages of work for the proposed East Coast Rail Link (ECRL) project. Lafarge said on Tuesday it had received a letter from its client, China's state-owned China Communications Construction (ECRL) Sdn Bhd (CCC ERL) to resume the supply for the remaining term under the contract until Dec 31, 2019. The total estimated provisional contract value for the cement supply was RM270mil.

Currently trading at RM 3.72, it is trading just below YTL's offer price of RM 3.75. 

To recap, in March 2018, Lafarge Cement Sdn Bhd had inked a deal with CCC ECRL to suppy the cement from then to Dec 31, 2019 to all eight packages of work for the project. The ECRL was then a 688-km railway line which will link the Klang Valley to Pengkalan Kubor in Kelantan. China’s state-owned China Communications Construction Co Ltd was awarded the RM55bil contract to be the main contractor via CCC ECRL. 

However, Lafarge announced in July last year the contract was suspended as the government was reviewing the project. 

On April 12, MRL and CCCC signed a supplementary agreement which paved the way for the resumption of the mega project. Under the new agreement, construction of Phases 1 and 2 of the ECRL will be resumed at a cost of RM44bil, a reduction of RM21.5bil from the original projection of RM65.5bil.

The rail line will have a new alignment which cuts its distance by 40km to 648km and reduces its cost per kilometre from RM98mil to RM68mil.

Source