Lessons from China’s penalty on Myitsone Dam

Opinion  |  Phar Kim Beng
Published:  |  Modified:

COMMENT | As I write this, Tabung Harapan is inching closer to one-fifth of a billion ringgit. That's nearly RM200 million ringgit. With National Day coming up, we may be even hit the figure by Aug 31.

Now, give or take a margin of difference of 5 percent, Tabung Harapan just might reach half-a-billion ringgit by the end of 2019.

A figure of RM500 million is not bad for a fund that was primarily started after the discovery of the missing billions in the Malaysian treasury, after the strategic electoral defeat of Umno and BN on May 9, 2018.

But what seems like a huge pool of funds parked invariably in Maybank, anything touching half a billion is very big, even if it is denominated in ringgit which is barely 25 percent of the US dollar. Malaysians have every reason to be proud of their commitment to democracy and fiscal probity.

However, when Tabung Harapan is measured or contrasted with the actual size of the national debt and liabilities of RM1.09 trillion, indeed the recent discovery of the missing RM32 billion in property gains tax; plus another missing RM16 billion in income tax returns; coupled with another missing RM19 billion in GST refunds – all of which were expended in three weeks prior to the run-up to the 14th general election – Malaysia's financial position is structurally weak.

What can half-a-billion ringgit by the end of 2019 do? One, it is enough to retire the High-Speed Railway (HSR) project between Singapore and Kuala Lumpur. Indeed, Malaysia probably has to bite the proverbial bullet if Singapore insists on pacta sunt servanda, whereby the contract, once signed, cannot be violated.

But that still leaves the 688km East Coast Rail Line (ECRL) project that extends from Port Klang to Kelantan – which Finance Minister Lim Guan Eng affirmed could reach RM81 billion if all elements, such as land acquisition, are taken into consideration – either pending, scrapped, or worst, penalised again.

If the latter happens, Malaysia cannot set up a Tabung Harapan II to decommission the ECRL project. This would be akin to asking the people to bail out the "historic stupidity" of the previous government, to borrow Mahathir’s words.

Besides, based on other precedents, it seems that the China Communications Construction Company (CCCC) will not let Malaysia get off easily. Why?

Take the Myitsone Dam project in Myanmar, for example. It was cancelled by the newly elected government in 2011...

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