SHAH ALAM • The Malaysian government could reduce its total debts by RM300 billion (S$99.5 billion) by cancelling three mega projects started by the previous government, Prime Minister Mahathir Mohamad said yesterday.
These are the Kuala Lumpur-Singapore High-Speed Rail (HSR), the East Coast Rail Line (ECRL) and the trans-Sabah gas pipeline projects, he said at a talk show in the Selangor capital, adding that these projects are too costly to be funded by the government.
Malaysia and Singapore last month signed an agreement to postpone work on the HSR for about two years, up to May 31, 2020.
The Malaysian government is in discussions on whether to scrap the ECRL, and has dropped the trans-Sabah pipeline, as the five-month old Pakatan Harapan government grapples with RM1 trillion in debts and liabilities.
The planned ECRL is a 688km rail line to link Port Klang in Selangor to towns in Pahang, Terengganu and Kelantan states, before ending in Tumpat near the Thai border in Kelantan.
"In the past, if we were to execute plans, we made sure that we had enough money," Tun Dr Mahathir said.
"If we did not have enough money, we determined how much was the debt level (and) how much could be repaid from the return on investment; that's the best way," he added.
This principle, he said, was not practised by the previous Barisan Nasional government, which he accused of incurring huge debts to carry out mega infrastructure projects without considering the ability to repay them.
"If we were to cancel these projects, the victims are their workers... So, we cancelled them so that we do not have to pay huge debts," Dr Mahathir said.
He cited the ECRL project as an example, where money was borrowed on the condition that a foreign company would be given the contract.
Said the Prime Minister: "Foreign workers were brought in, while equipment and tools were all made by a foreign country. So what do we get? We've got nothing."
Dr Mahathir was referring to the ECRL project that was being carried out by the contractor China Communications Construction Co. The loan for this project comes from China's Exim Bank.
Separately, Finance Minister Lim Guan Eng said yesterday in Parliament that the total cost of the ECRL would come to RM80.92 billion, and not RM55 billion as announced by the previous government led by Najib Razak.