Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on January 30, 2019

PUTRAJAYA: The fate of the controversial RM81 billion East Coast Rail Link (ECRL) project will be known soon as Finance Minister Lim Guan Eng is due to issue a statement on the matter, says Prime Minister Tun Dr Mahathir Mohamad.

The premier, however, acknowledged that an error had occurred during the dissemination of information on the project over the weekend.

“Sometimes some ministers make announcements before they are due. I admit that a mistake was made and we are going to correct that mistake,” he told a press conference after the launch of the National Anti-Corruption Plan yesterday.

“The finance minister will soon give a clear explanation as to what had happened,” he added.

On Saturday, Economic Affairs Minister Datuk Seri Mohamed Azmin Ali revealed that the cabinet had decided to cancel the ECRL after reviewing the costs which were deemed too high and beyond the government’s financial capabilities for the time being. “If the project is not terminated, the government will have to bear the interest rate of about RM500 million a year,” he had said.

Just hours after Mohamed Azmin’s announcement, Guan Eng was reported as saying at another function that he was shocked by Mohamed Azmin’s announcement.

Yesterday, Dr Mahathir explained that Malaysia cannot just take on the multibillion ringgit project due to the country’s current heavy debt burden. “We have to cut back on some of the expenditure incurred by the previous government. It is not because we don’t want to honour our contracts but we just cannot pay [them],” he added.

The prime minister also noted that the ECRL contract “will impoverish” Malaysia and seeks the understanding of the parties concerned regarding the country’s current financial position.

Asked whether the compensation sum to be paid if the China-backed project is called off is a concern to the government, Dr Mahathir said the amount will not be as big as the cost of the contract, which will be carried over the next 30 years.

In a separate event yesterday, Guan Eng said he has been advised by Dr Mahathir during a meeting earlier not to make any further statement on the ECRL for now.

“So, wait for the statement,” he told reporters after launching a RM1 billion fund established by Bank Negara Malaysia to facilitate lower income earners to purchase affordable homes nationwide.

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