KUALA LUMPUR, May 8 — The East Coast Rail Link (ECRL) will remain a loss-making enterprise for “years” despite its lower cost now, according to Tun Daim Zainuddin.
The former finance minister said he already thought so before and has not changed his views despite successfully negotiating a RM21.5 billion reduction in the mammoth infrastructure’s overall price tag, according to his interview with the South China Morning Post (SCMP).
He pointed out that former prime minister Datuk Seri Najib Razak’s administration signed the initial agreement with China that obligated Malaysia to proceed with the project regardless of who was running the federal government.
“There is a binding agreement it may be one-sided, but it is equally binding [on Malaysia]. You can’t blame the Chinese. If you are silly enough to sign the agreement, then it’s your problem,” he told the SCMP in allusion to the Najib administration.
Last month, Putrajaya announced the improved deal with China on the ECRL, which involved a supplementary agreement between Malaysia Rail Link Sdn Bhd (MRL) and the China Communications Construction Company Ltd (CCCC) following months of negotiations after the project was suspended last year.
The construction cost for Phases 1 and 2 of the ECRL was reduced to RM44 billion from its original cost of RM65.5 billion, but detractors maintain the project should not be carried out due to the alleged corruption built into the agreement.
Daim challenged critics of the “enhanced deal” to submit their proposals for how Malaysia could avoid proceeding with the project without paying billions in penalties.
“Those who criticise, put it in writing and send it to the government. Come out in the open,” Daim told the SCMP.
“Don’t criticise. Some people say, why don’t you walk away from the agreement. You don’t have to pay one cent. Do they know the agreement or not?”
Despite his negative prognosis of the project, Daim said Malaysia was at least able to secure China’s commitment to take on half the liabilities for the future operational costs.
China also did not seek to impose additional conditions beyond those that were already in existence, he said.