PM: Malaysia in huge debt for 30 years with ECRL

by DASHVEENJIT KAUR / pic by MUHD AMIN NAHARUL

THE government would be saddled with a huge debt over the next 30 years should the East Coast Rail Link (ECRL) project resume, Prime Minister (PM) Tun Dr Mahathir Mohamad said.

He said the amount of compensation the government needs to pay would not be as huge if the RM81 billion project, which would connect Port Klang in Selangor to Pengkalan Kubor in Kelantan, is cancelled.

“The huge compensation is not as huge as the amount we will carry for the next 30 years,” he told reporters after launching the National Anti-Corruption Plan 2019-2023 at the Putrajaya International Convention Centre yesterday.

“We are burdened with very heavy debts. We just cannot pay. So, we have to cut back on some of the expenditures incurred by the previous government.

“It is not because we don’t want to honour our contracts, but we just cannot pay because these contracts may cost us more than RM100 billion and it will impoverish us.

“We (need the understanding) of the parties concern, it is not we want to frustrate or throw out contracts. We are really tight in terms of finance,” Dr Mahathir said in a Bernama report.

As for the fate of the project, Dr Mahathir said Finance Minister Lim Guan Eng would give a clearer explanation on the matter.

Responding to a question on contradictory statements made by ministers about the status of the ECRL project, the PM said: “Some mistakes are made and we’ll be correcting the mistakes. We seek your understanding.”

Meanwhile, Lim said Dr Mahathir has issued a gag order that restricts any announcement related to the ECRL project.

“I have met with the PM this morning, and he has suggested that I do not make any announcement for the time being. So, please wait for the statement,” Lim told reporters after launching Bank Negara Malaysia’s RM1 billion fund dedicated to affordable home buyers in Kuala Lumpur yesterday.

Lim also did not specify the deadline for any new statement to be made on the project.

On Sunday, Lim said an official statement would be issued on the status of the ECRL project this week, a day after Economic Affairs Minister Datuk Seri Mohamed Azmin Ali announced that the government had scrapped the China-backed RM81 billion project.

Azmin said the country could not afford the RM500 million annual interest that would be incurred if the project was continued.

An international news portal also recently reported that Malaysia was in the process of seeking a new contractor to lead the ECRL project after terminating the contract that was earlier awarded to China Communication Construction Co Ltd (CCCC).

Quoting sources, the report said Putrajaya was seeking to reduce the cost of the megarail project from the original amount by half.

It was also reported that the ECRL project, which is owned by Malaysia Rail Link Sdn Bhd (MRL), had progressed by almost 14%, mostly related to technical work and land acquisition.

MRL is a special-purpose vehicle wholly owned by the Minister of Finance Inc.