KUALA LUMPUR, June 17 — Former finance minister Tun Daim Zainuddin has recommended that the Perikatan Nasional (PN) administration prioritise the East-Coast Railway Link (ECRL) over the Singapore-Malaysia high-speed rail (HSR) for the potential economic benefits that one has over the other.
Daim, in a report by portal The Malaysian Insight (TMI), stressed it would make sense to prioritise the ECRL since most of the project is financed by a loan and not directly from the government’s coffers.
He said about 85 per cent of the RM44 billion cost needed for the interstate railway line would be borne by China’s Exim Bank with repayment only beginning once the project is in operation, expected to be around 2027.
Daim also stressed that it took great effort to renegotiate the ECRL’s price tag with China when Pakatan Harapan (PH) took over as government in 2018, which was reduced from its original price of RM66 billion.
“It not only saved the country billions of ringgit but is also better and safer for the country in the long run,” he said.
When comparing it to the HSR, Daim said that unlike the ECRL, which is a Malaysian-owned project using 40 per cent of local talent, the RM110 billion railway link with Singapore costs more and its existing agreements would allow Singapore “too much say” over the local portion of the project.
“If we go ahead with the HSR project later and in accordance with its original conditions, I fear Malaysia will be giving up her sovereignty to Singapore.”
“Many are not aware that under the original agreement, Singapore would have equal say over the use of the rail line within Malaysian borders.
“For instance, if Malaysia wants to link the HSR line with the ECRL, Singapore can object and they will, because they know that such a linkage will affect their port industry,” he was quoted as saying in the TMI report.
Daim’s comments come as the PN government also decided to postpone the HSR project until the end of the year.
Daim added there would also be “fringe benefits” from the ECRL, which could spur markets such as the palm oil industry, encourage more joint operations and maintenance, local investments and while increasing local components circulation and other corridor investments.
He said the construction of the ECRL would also boost commerce and industries in the states it passes through, adding how time is of the essence when strategising such expensive megaprojects.
“Timing is key. Further delaying the project would mean being unable to leverage on the expected benefits at the opportune time.
“As the ECRL does not require government funds to proceed, it should be encouraged instead of being delayed,” Daim said.
He said the project’s financing terms and long repayment period make it a prime example of how to utilise cheap foreign financing to aid in the country’s economic recovery, but stressed the need to resume the project as interest on amounts drawn down by the previous governments must still be serviced.
“Whether you continue or you dither, the interest has still to be paid. So, we might as well start on the project as any delay will add further to the costs,” he said.