Malaysia may resume East Coast Rail Link project, but on smaller scale: Mahathir

The 688km rail link, if built, would connect Port Klang in Selangor with Pengkalan Kubor in Kelantan and would be constructed in two phases.
The 688km rail link, if built, would connect Port Klang in Selangor with Pengkalan Kubor in Kelantan and would be constructed in two phases.PHOTO: ST FILE

PETALING JAYA - The East Coast Rail Link (ECRL) project, which was suspended last July, could resume on a smaller scale if China agrees to the move, Prime Minister Mahathir Mohamad was reported by Malaysian media as saying.

He said both countries are still in talks on the matter and have not arrived at a good solution.

"What we are trying to do is to ensure that we will not spend much money while China will not suffer a loss," Tun Mahathir told the Chinese-language Sin Chew Daily in an interview on Monday (Dec 31).

The interview was picked up by Malaysiakini on Wednesday.

Malaysia is in a dilemma between terminating the project or continuing with it, with either option entailing huge financial costs, he said.

Malaysia will therefore seek to amend the project or other alternatives, he said.

"We are negotiating - formally or informally - with them (the Chinese). To them, this is a profitable contract, so they are reluctant to make changes," he said.

Before the May 9 general election, the now-ruling Pakatan Harapan alliance led by Dr Mahathir had vowed to terminate the ECRL project, as it said the contract and loan terms were unfavourable to Malaysia.

"But this is not easy, as we were bound by the contract and could not terminate the project easily, as we have no money to pay China… We have paid a lot of money to China after the postponement," he said.

The RM81 billion (S$26.6 billion) ECRL project was approved by Cabinet under then-Premier Najib Razak in October 2016. The construction was to be handled by China Communication Construction Company (CCCC) while the financing was to be provided by Export-Import Bank of China (Exim Bank of China).

Malaysia would be able to secure part of the loan from Exim Bank of China on the condition that CCCC builds the railway.

'ECRL a waste of money'

The 688km rail link, if built, would connect Port Klang in Selangor with Pengkalan Kubor in Kelantan and would be constructed in two phases.

Dr Mahathir said the ECRL is a waste of money, as the government would not get any returns from the rail project and there is no way for Putrajaya to tax the concessionaire.

He also cited the West Coast railway line, from which he claimed the government never made a single sen, despite its heavy usage.

"Along the ECRL, there are fewer people and the people are mostly poor - not doing big business like the people along the West Coast railway line - so you cannot get your investment back.

 
 
 
 

"The returns from the project are close to 'zero' and we need to pay an RM55 billion debt," he said.

Dr Mahathir also denied during the Sin Chew interview that he is a "pro-Japan, anti-China" leader, noting that he had defended China when he attended a forum in Japan.

"They asked me of my feelings about China. I said that Malaysia is always in touch with China and we are trading partners. We are always friendly to China," he said.

China came to Malaysia for trade centuries ago but it never colonised Malaysia, unlike the Portuguese, he said.

"So, which countries should (you) fear? China or Europe?" he asked.

"The Chinese people used to know me as their friend. Now, I am said to be not friendly to them, just because our government is reviewing ECRL and Trans-Sabah Gas Pipeline (TSGP) projects?

"The Chinese government understands about our financial problems. It is not that we don't want (these projects), but (these) are bad projects in the first place and we cannot afford them," Dr Mahathir said, adding that he would travel to China if it was necessary.

He also said that Putrajaya will not return the two giant pandas, given to Malaysia on May 21, 2014, earlier than the date agreed by both countries.

"No, this is a gift," he said, admitting that the pandas are a meaningful symbol of the bilateral relations between China and Malaysia, and that Malaysia would treat the pandas with care.

He said the Cabinet has never discussed about the matter and he knew nothing about the statement made by Water, Land and Natural Resources Minister Xavier Jayakumar.

Dr Xavier said in November that Putrajaya would discuss with the Chinese government on the status of the Giant Panda Conservation Programme in 2019 over its cost.

"The negotiations will have to be carried out with the China Wildlife Conservation Association on whether to continue keeping the giant pandas with the second cub," said Dr Xavier, adding that the government spent RM4.65 million for the pandas in 2018.

He added that the cost of managing the pandas is expected to increase to RM7.38 million in 2019.