East Coast Rail Link deal before belt and road forum? Depends on China, Mahathir says
- The Malaysian prime minister says the ball is in Beijing’s court when it comes to the long-stalled project, which he has attacked as being overpriced
- He now estimates the cost could balloon to US$32 billion – as opposed to the US$13 billion claimed by his predecessor Najib Razak
Mahathir: green light for China-backed ECRL, if price is right
Mahathir’s administration, with the premier’s top confidante Daim Zainuddin at the helm, is in direct government-to-government negotiations with Beijing to drastically reduce the project’s price tag.
According to Kuala Lumpur’s latest estimates, the true cost of the 688km line would be 130 billion ringgit (US$32 billion), rather than the 55 billion ringgit (US$13 billion) touted by Mahathir’s predecessor as prime minister, Najib Razak.
Mahathir claims Najib offered the contractor, China Communication Construction Company, a sweetheart deal.
The second summit of its kind, the forum from April 25-27 will be Beijing’s biggest diplomatic event this year.
“I cannot say [it will conclude] before I go to China because at this moment, we depend not only on the Malaysian negotiators, but also the response from China,” he told reporters on the sidelines of parliament.
I’d side with rich China over fickle US, Malaysia’s Mahathir says
Fielding questions on the controversial project in the legislature earlier, Mahathir said the rail link would be allowed to continue “on an appropriate scale”.
In its current form, the double-track, fully electrified rail link could balloon in cost to 130 billion ringgit, he said.
That estimate is the highest yet, topping an 81 billion ringgit figure suggested by Mahathir’s Finance Minister Lim Guan Eng.
At current levels, Malaysia would be servicing its debts for up to 30 years, the premier said.
The outcome of negotiations to pare down the cost of the project would be announced when a decision was finalised, he said.
“If the negotiations are fruitful, the government is confident the project can continue on an appropriate scale, with benefits for the people and saving Malaysia from the burden of large debts,” he said in response to questions from an opposition lawmaker.
The prime minister was also quizzed on why it was Daim, a retired finance minister, and not Lim, the current finance tsar, who was negotiating with the Chinese.
‘We’re too close to China’: is Thailand about to ‘do a Mahathir’?
To that, the prime minister said: “He [Daim] was chosen because of certain of his capabilities. Sometimes when we are negotiating, we need a person who will be accepted by the other parties. We face certain challenges in choosing the best person to carry out the negotiations.”
“That is why we chose someone outside [the government] after making the evaluation as to who is the best suited and capable to discuss this with China,” he added.
The Malaysian government has been sending out mixed signals on the ECRL for months.
In January the government issued a “gag order” on officials, authorising only Mahathir to comment on negotiations.
The ECRL is the biggest of the China-backed infrastructure projects to have been cast into doubt by Mahathir, who questions the need for the rail link as well as its cost and claims his scandal-haunted predecessor signed up in blasé fashion.
Najib, who denies wrongdoing, claims to have endorsed the ECRL deal solely because it made good economic sense.
Besides the ECRL, Mahathir’s government last year cancelled two China-backed pipelines costing 9.3 billion ringgit after it discovered that, while 90 per cent of the project’s costs had been paid, only 13 per cent of it had been completed.
