Malaysia must learn from Sri Lanka's experience before it is too late, and ensure the feasibility of all mega projects are thoroughly studied and they are awarded through open tender, said DAP's Damansara Utama assemblyperson Yeo Bee Yin today.

Citing the huge debts incurred by Sri Lanka after taking in money from China to fund underutilised mega infrastructure, Yeo said there are chances that reckless mega infrastructure constructions will send Malaysia into a deep debt trap.

"Instead of investing in education and health care, Sri Lanka spends most of its revenue now to pay off the debts to China that was used to finance the now underutilised mega infrastructure, from port to airport.

Sri Lanka has a new airport that is called the world’s emptiest airport. The Mattala Rajapaksa International Airport only handles a few flights a day.

"In fact, the new president Maithripala Sirisena, who unseated the former president Rajapaksa by riding on his unpopularity over incurring huge Chinese debt to build the underutilised infrastructure, is now facing protest because he gave China a huge piece of industrial land with a 99-year lease in order to alleviate the country’s debt burden," Yeo said in a statement.

What happened to Sri Lanka offers a glimpse into how mega infrastructures financed by debt, without a proper framework, is a "debt disaster" in the making, she added.

Yeo then urged the government to pay heed to prominent banker Nazir Razak's recent suggestion for Putrajaya to thoroughly scrutinise China-led investments, especially the RM55 billion East Coast Rail Line (ECRL) project.

Yeo said the opposition has repeatedly raised concerns regarding the ECRL but "all seem to have fallen on deaf ears".

"Now even Nazir Razak, who is a prominent banker, raised concerns over the value proposition of the project as well as the debt implications. We hope that Putrajaya will heed his suggestion to thoroughly scrutinise the deal," she said.

Yeo pointed out that the ECRL project was given to the China Communication Construction Co Ltd (CCCC) without an open tender, and is to be financed from a loan by Export-Import (Exim) Bank of China, with interest rates that are unspecified.

"Putrajaya has repeatedly said that the loan is offered at a low-interest rate, but how 'low' is the 'low-interest rate'? What are the terms and conditions?" she asked.

She added that it seems that most of the money that comes from China in the project, will go back to China, and all that is left for Malaysia, will be an overpriced infrastructure and huge debt - which will be paid by taxpayers in the future.

Therefore, the government must lift the veil of secrecy shrouding the ECRL deal to prove that it has nothing to hide, urged Yeo. She suggested disclosing the following documents: 

  • all the relevant studies on the ECRL, including the feasibility studies done by HSS (the engineering group tasked with the job);
  • the framework financing agreement and engineering, procurement, construction and commissioning contract signed between Beijing and Putrajaya; and
  • the estimated ridership and the future price for passengers’ train tickets and cargo transportations to make the project at this price tag economically viable.

Only when the facts are laid out, the people can judge if the project is fairly priced or otherwise, she said, calling on Putrajaya to further review its ECRL deal made with China.