Putrajaya's decision to use a company it does not directly own to sign the East Coast Rail Link deal has led to PKR vice-president Rafizi Ramli evoking bad memories on SRC International Sdn Bhd's loan troubles.

Rafizi said Companies Commission documents clearly state that the firm, Malaysia Rail Link Sdn Bhd, was owned by two finance ministry officials and not any entities belonging to the government.

"Even if the two shareholders agree to transfer the shares to the Ministry of Finance Inc (MOF Inc), what process would be used to allow the MOF Inc to take over the RM46 billion debt?

"The deal was signed through a company that has no official links with the Malaysian government," said Rafizi in a statement today.

He said Malaysians had seen a similar scheme before in the form of SRC International.

1MDB established SRC International in 2011. Following this, Putrajaya allowed SRC International to borrow RM4 billion from Malaysia's Retirement Fund Incorporated (KWAP).

A year later, MOF Inc took over SRC International and its debts. SRC International is now the subject of money-laundering investigations, most prominently in the United States and Switzerland.

"Eventually, the RM4 billion loan that was taken by 1MDB through SRC International was nationalised and made the people's burden.

"The same might happen through Malaysia Rail Link which is handling the ECRL," said Rafizi.

He was responding to Abdul Rahman Dahlan, the minister in charge of the economic planning unit, who claimed that Malaysia Rail Link was a special purpose vehicle "wholly owned" by the finance ministry.

"There is no issue of who is behind the firm or whose interests it represents," the minister told reporters yesterday.

Why the haste?

Rahman said that there was also no issue with the company having only a paid-up capital of RM2.

He also explained that the RM46 billion deal cited by the Chinese Communications Construction Company's (CCCC) website was in reference to the Gombak-Kuantan-Tumpat portion of the ECRL.

The Port Klang-Gombak portion of the ECRL, said Rahman, had yet to be finalised.

In his statement today, Rafizi also questioned why Putrajaya appearing to have "rushed" the deal since the Port Klang-Gombak portion had not been confirmed.

"Won't it be better to negotiate the ECRL deal once and for all, as one package, from Port Klang to Tumpat?

"Won't it be cheaper? The contractor wouldn't have to pay mobilisation cost twice and obtain cheaper materials through economies of scale," he said.

Rafizi suggested that perhaps Putrajaya was in great haste to secure financing ahead of several major events.

"There are big events in 2017: The payment of 1MDB's debts... (payments to) IPIC if 1MDB loses in the arbitration process and the 14th parliamentary elections.

"These are things that cost a lot and instant money is needed," he said.

READ: The SRC phase - the unsolved piece in the 1MDB jigsaw