June 18, 2024

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Mahathir, Guan Eng not on same page on ECRL?

saved cost

KUALA LUMPUR, Oct 23 – The Pakatan Harapan government has saved RM300 billion by just cancelling various infrastructure projects, Tun Dr Mahathir Mohamad told a forum yesterday.

Speaking at the event hosted by Bahasa Malaysia daily, Sinar Harian, the prime minister said the huge amount would have been incurred if the East Coast Rail Line (ECRL), Kuala Lumpur-Singapore High-Speed Rail and Trans-Sabah Gas Pipeline projects were allowed to proceed.

“The projects were too costly to be funded by the government, while their development plans did not match the expectations of returns to recover the debts incurred.

“In the past, if we were to execute plans, we ensured that we had enough money. If we did not have enough money, we determined how much the debt level was and how much could be repaid from the return on investment. That’s the best way,” he was quoted as saying by Bernama.

ECRL project may still go on, says Lim Guan Eng

Mahathir’s comments seemed to contradict that of Finance Minister Lim Guan Eng, who told the Dewan Rakyat yesterday that the government has not decided on the final status of the ECRL project as negotiations are still ongoing with the contractors.

“Four sessions of negotiations have been conducted since July 2018.

“Malaysian Rail Link Sdn Bhd (MRL) and China Communications Construction Co (CCCC) have also conducted several technical discussions between July and October to look into suggestions and steps to reduce the costs to complete the ECRL project.

“However, until now, MRL and CCCC have not reached any agreement on the suggestions to reduce the costs,” Lim was quoted as saying, The Edge reported.

MRL is an agency under the Finance Ministry. The ECRL is not included in the list of high-impact projects under the Mid-term Review of the 11th Malaysia Plan 2016-2020 published on Thursday.

BN government did not follow principles of past administrations

Speaking on government spending for huge projects, Mahathir accused the previous Barisan Nasional government, under former prime minister Datuk Seri Najib Razak, as not sticking to the same principles and in effect, causing the country to incur huge debts by carrying out mega infrastructure projects without considering the ability to repay them.

Mahathir gave the example of the ECRL as being built on borrowed money, with the added proviso for a foreign company to be given the massive construction project.

“Foreign workers were brought in, while equipment and tools were all made by a foreign country. So, what do we get? We’ve got nothing.

“If we were to cancel these projects, the victims are their workers, not ours. So, we cancelled them so that we do not have to pay huge debts,” he said, according to Bernama.

3rd national car for engineering, manufacturing prowess

Speaking on the third national car project, however, the prime minister defended his proposal saying it would be a catalyst to stir the people’s interest on the importance of mastering engineering and manufacturing knowledge.

“A car has 4,000 parts. If we want to make a car, we have to know about designing, testing, parts and quality. We have to learn all these.

“When a nation controls engineering knowledge, its people will go forward,” he was quoted as saying by Bernama.

Malaysia to demand return of RM10 billion if ECRL terminated

Meanwhile, Lim told the Dewan Rakyat the ECRL project would cost around RM80.92 billion to build, and the country has paid RM19.68 billion comprising RM10.02 billion advanced payment bond and RM9.67 billion for works completed as at Feb 15, 2018.

Lim also said that should the project be terminated, the government could claim back the RM10.02 billion paid to ECRL contractors.

The other rail transportation project under the Najib administration, the KL-Singapore HSR is still expected to proceed, albeit delayed.

An agreement was signed between the two governments last month to postpone the project for nearly two years, with Malaysia paying about RM45 million in abortive costs to Singapore by January next year.

Malaysia will also have until May 31, 2020 to proceed with construction work.