Media Statement by Yeo Bee Yin, ADUN Damansara Utama, on Friday
21 July 2017 in Petaling Jaya.
Putrajaya should heed
Nazir Razak’s suggestion to thoroughly scrutinize East Coast Rail Line (ECRL).
The Edge Financial Daily reported that Nazir Razak has called
for government scrutiny on China’s One Belt, One Road (OBOR) initiatives,
particularly the East Coast Rail Line (ECRL) project at the roundtable on
“China’s Belt and Road Initative in ASEAN: Economic Opportunities and ASEAN
Centrality”[i].
We have repeatedly raised concerns regarding the East Coast
Rail Line (ECRL) but all seem to have fallen into deaf ears. Now even Nazir
Razak, who is a prominent banker, raised concerns over the value proposition of
the project as well as the debt implications, we hope that Putrajaya will heed his
suggestion to thoroughly scrutinize the deal.
ECRL project is awarded to China
Communication Construction Co Ltd (CCCC) without open tender. At RM 55 billion
price tag, it is deemed the most expensive railroad of its kind by The Edge
Weekly after benchmarking it against other rail projects around the world. The
project is going to be financed by a loan from China via Export-Import
(Exim) Bank of China. Putrajaya
has repeatedly said that the loan is offered at low interest rate, but how
“low” is the “low interest rate” ? What are the terms and conditions?
In short, it seems like with ECRL deal, most of the
money that come from China via Exim bank will go back to China via CCCC, what’s
left for Malaysians is an overpriced infrastructure and huge debt, only to be
paid by the people in the future.
There is
risk that reckless mega infrastructure constructions will send Malaysia into
deep debt trap. What happen to the troubled Sri Lanka offers a good
glimpse into how mega infrastructure financed by debt without proper framework
to benefit local economies through the construction and completion of the
infrastructure, is not development but debt disaster in the making.
Instead
of investing in education and health care, Sri Lanka spends most of its
revenue now to pay off the debts to China that was used to finance the now
underutilized mega infrastructure, from port to airport. Sri Lanka has a new
airport that is called the world’s emptiest airport - Mattala Rajapaksa
International Airport, which only handles a few flights a day.
In fact, the new president Maithripala Sirisena,
who unseated the former president Rajapaksa by riding on his unpopularity over
incurring huge Chinese debt to build the underutilized infrastructure, is now
facing protest because he gave China a huge piece of industrial land 99 years
lease in order to alleviate the country’s debt burden.
We must learn from Sri Lanka’s experience before
it is too late. All mega projects must be studied carefully on the
project feasbility and awarded through open tender.
So far, the ECRL deal has been shrouded with
secrecies. The federal government must disclose the following documents to
prove itself to have nothing to hide:
i. all the relevant studies on the ECRL, including the
feasibility studies done by HSS;
ii. the framework
financing agreement and engineering, procurement, construction and
commissioning contract signed between Beijing and Putrajaya; and
i. the estimated riderships and the future price for
passengers’ train tickets and cargo transportations to make the project at this
price tag economically viable.
With the information available from the documents
above, the people can then judge if the project is fairly priced with proper
financing procedures. With that, we call upon greater transparency from
Putrajaya in dealing with mega projects. Once again, we urge Putrajaya
to review ECRL deal it made with China.
