Malaysian Trade Chamber urges public to give time ECRL to find the solution
Just weeks after Malaysia’s China-backed East Coast Rail Link (ECRL) project appeared to be mired in indecision, the Malaysia-China Chamber of Commerce has urged non-governmental parties to exercise caution when discussing the matter as reviews and negotiations of the “sensitive” project continue.
Prime Minister Mahathir Mohamad also struck a note of careful optimism when asked about the ECRL at a press conference on Tuesday night. “I am not supposed to speak now as [Kuala Lumpur and Beijing] are talking to each other,” he said. “It’s good to talk to each other, we will find some solution.”
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In a statement on Wednesday, the MCCC said it hoped Malaysia and China could establish a common understanding over the “sensitive issue” and handle negotiations in a “friendly” manner to “minimise losses or even to achieve a win-win solution”.
“[We call on] non-governmental people and organisations to give the governments of both Malaysia and China sufficient space and time for handling the ECRL project,” it said.
The MCCC added that it was “very concerned” about the progress of various China-backed mega infrastructure projects in Malaysia, but said the two countries had “affirmed each other’s goodwill and complementary cooperation, and have reached valued consensus”.
The body also said an amicable solution to the ECRL and other capital-intensive projects would be “the best gift” to mark 45 years of diplomatic relations between Malaysia and China.
Projects such as the ECRL were signed before the general elections in May 2018, which saw China-friendly Barisan Nasional dethroned by Mahathir’s Pakatan Harapan coalition.
The new administration cancelled, delayed, or reviewed mega projects agreed upon by its predecessors, arguing that it was unable to commit to these deals as Barisan Nasional had depleted federal coffers.
Malaysia’s ECRL: Officials flip-flop over future of US$20 billion China-backed project
The ECRL, in particular, saw the Pakatan Harapan government equivocating as it released contradicting statements on the project’s status.
In late January, Economic Affairs Minister Azmin Ali said it was cancelled due to the high annual interest the government would incur – at least 500 million ringgit (US$122.8 million) – although Malaysia “still welcomes all forms of investment from China [on] a case-by-case basis depending on the present country’s financial capabilities”.
Soon after, however, the administration backtracked and Mahathir maintained that “no final decision has been made”, suggesting that one of his ministers had “made a mistake”.
These remarks came as Chinese Vice-Foreign Minister Kong Xuanyou – in Malaysia for an official visit – and foreign ministry spokesman Geng Shuang both suggested on Monday that talks were ongoing.
This Week in Asia understands that a firm government decision on the matter is expected after February 19, following the conclusion of this year’s Lunar New Year celebrations.
After coming to power, Mahathir identified the ECRL as one of several mega infrastructure Chinese-backed projects that he felt had to be cancelled because of cost and lack of necessity. He later indicated the project could continue, but only if it did so on a smaller scale.
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While the previous government – which offered the project without tender – estimated the project would cost 55 billion ringgit, the current administration believes the figure is closer to 81 billion ringgit. The 688km rail project’s main contractor is China Communications Construction Company (CCCC), and the Export-Import Bank of China is the main financier.
Some 19.68 billion ringgit had already been paid by the government before work was suspended in July.
Besides the ECRL, two China-backed pipeline projects costing 9.3 billion ringgit were also cancelled after the new government discovered that only 13 per cent of the project had been completed despite 90 per cent of the sum being paid.
(Source : South China Morning Post, 13 Feb 2019)