Malaysiakini News

ECRL could be a Malaysian disaster

Nurul Izzah Anwar  |  Published:  |  Modified:

MP SPEAKS | The East Coast Railway Link (ECRL), all 688 kilometres from Port Klang to Kelantan is touted by Prime Minister Najib Abdul Razak as an "economic game changer." But it could well be a Malaysian disaster.

Research by Professor KS Jomo has shown that the current traffic of two million tonnes of freight a year has to be increased by an exponential of 10 (times) to reach 200 million tones to make it all profitable.

Even then such tonnage has to be achieved in 2020, not later. 

With a debt moratorium of seven years, a clock that has started thinking, any slowdown in the completion of the ECRL project will tie Malaysia's finances in knots. At RM55 billion, this is an albatross that will weigh on the financial neck of the country, period.

There are two reasons. Moratorium on debt servicing can start seven years later on paper.

But if the project is slowed down or left uncompleted in seven years, to whom does the Malaysian government turn to if the debt moratorium has to be renewed?

Does Malaysia deal with the China Communications Construction Company (CCCC), or Beijing? If it is the latter, why should Beijing give an inch if the project appears to run into trouble?

In the case of Venezuela, for example, China insisted on being paid in barrels of petrol produced by Caracas, should the government fail to fulfil its US$9 billion obligations.

Through 1MDB, one has seen how the Malaysian government has been eager to provide letters of guarantee to absorb all debts when some or all projects become toxic. The same could yet happen with ECRL with the cost passed to the average Malaysian taxpayers.

In the case of Sri Lanka, when Colombo could not repay China, Port Hambantota had to be leased to Beijing for 99 years.

In Djibouti, Africa, debts have reached nearly 80 percent of its GDP, according to the Center for World Development in Washington DC.

A research from the Wall Street Journal has also confirmed that some ten countries may run into such strong financial headwinds to bring it into sovereign disrepute, one of which is the Maldives, with Malaysia not far behind if we continue our debt binge from China.

In other words, what seems like a free lunch from China to Malaysia now, could quickly develop to a "take all" from China.

Bad economic judgement

It is not so much economic colonization by China but a bad economic judgement by Najib and the Ministry of Finance, the Ministry of Transport and the Ministry of International Trade and Industry, wholesale.

In fact, other things have been stranger. While Najib, in the groundbreaking ceremony in Kuantan, affirmed that the entire cost was RM55 billion, the chief executive of the CCCC contradicted him the next day, by insisting the whole project costs only RM47 billion. Who should we trust and which figure is the benchmark? Alas, the rubber stamp of the Malaysian Parliament hardly leaves room for legislative scrutiny.

The difference of RM8 billion is huge, as reported by Free Malaysia Today last year. And, one wonders if this is the sheer inability to calculus the requisition of the land.

Even Abdul Rahman Dahlan, the minister in the Prime Minister's Department, reversed the government's previous position on a single track project, to potentially a double track ECRL. While a double track ECRL can carry more cargos and tonnage, how will the cost shoot up?

Elsewhere, in a written reply to Raja Kamarul Bahrin Shah, an Amanah MP, Deputy Prime Minister Ahmad Zahid Hamidi claimed that the CCCC will bring in all Chinese workers, ostensibly on the reason that China cannot communicate in any other local languages once the project has started.

This leads one to wonder if Umno has tried to butter the bread both ways. On one hand, it overcharges the CCCC by RM8 billion, or more.

On the other hand, vested interests in Umno that run foreign workers' agencies in Malaysia, enjoy the advantage of importing Chinese workers too.

Again this is a project larded with the politics of advancing the interest of Umno first, not even Sino-Malaysian relations proper.

China is not stupid

But more importantly, no matter how Umno loads the Chinese dice to win at every game, China isn't stupid.

Beijing now knows that it can work with Pakatan Harapan government, with Ambassador Bai Dian being extremely quiet whenever Najib or MCA affirm that any vote to Harapan will mean a disaster to Chinese projects.

On the contrary, Chinese projects that have been awarded will be streamlined to ensure zero corruption and maximum yield to Malaysian workers.

Such a policy thrust sits well with the spirit and letter of the Belt and Road Initiative propounded by President Xi Jin Ping of China, which Harapan endorses too.

Harapan, however, wants China to be more sensitive to the economic needs of the Malaysian wager earners, even Bumiputera contractors with their government-issued F licences.

As things are, be it single or double track project, China cannot let Umno get away with a questionable project.

In fact, the original East Coast Railway project was conceived in 1984, invariably by the Japan International Cooperation Agency (Jica).

But Dr Mahathir Mohamad felt that the project could not take off economically or strategically, granted that ships could just as easily pass through the narrow Straits of Malacca to reach Klang, Johor and Penang. The redundancy of building ECRL was, therefore, shelved.

By picking up from where Japan left off, Umno has tried to prey on the fear of China being choked off in the Straits of Malacca, and when China knows ECRL is a one-two combo from Umno and MCA to rip China off, Beijing would feel double-crossed.

Malaysians, it’s time to lose the economic gambit and choose wisely.


NURUL IZZAH ANWAR is Lembah Pantai MP and PKR vice-president.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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